For years, Capitec was known for offering some of the highest interest rates on day-to-day accounts which was a major drawcard for clients.
Many customers used the main account not only for transactions but also to earn decent interest to help offset monthly bank fees or even grow small savings. Now, with rates slashed, that advantage is largely gone.
But all hope is not lost for those who want to stay loyal and not migrate to TymeBank or other competitors. Clients are being steered toward the bank’s dedicated savings products instead.
Capitec themselves says these changes are meant to encourage better saving habits cause they feel South Africans don’t save. But the real motivation in the face of loss of profitability and mounting pressure from competitors is also quite obvious.
‘the real motivation …is also quite obvious’
By encouraging customers to separate spending and savings, Capitec can manage funds more effectively — using clients savings deposits to support their own lending and other business activities.
Also, with lower rates on their incredibly popular transactional accounts, the bank reduces the cost of holding client funds, which could improve profits. Capitec have been under financial pressure from some time now and have to look at ways to be more profitable.