MCB Savings By Interest Tiers

MCB Savings By Interest Tiers

MCB Bank, one of the largest banks in Pakistan, offers various savings accounts to customers. Unlike conventional banks that pay fixed interest rates, MCB Bank provides returns on savings accounts through multiple interest tiers linked to account balances.

This system of interest tiers enables higher returns for customers who maintain higher account balances. It encourages financial discipline and the savings habit – hallmarks of an Islamic economy. Let’s examine how MCB Bank offers interest tiers on different savings products.

MCB Bachat Account Tiers

MCB Bachat Account Tiers

The MCB Bachat Account is an all-purpose Islamic savings account targeted at individuals. Account holders earn profit through variable returns determined by their average monthly balance.

MCB Bank provides interest tiers based on four brackets of average monthly balances in the Bachat Account:

Tier 1: Avg. Monthly Balance up to PKR 10,000

  • No profit paid

Tier 2: Avg. Monthly Balance PKR 10,001 to PKR 50,000

  • Calculated Daily Product Basis
  • Paid Quarterly

Tier 3: Avg. Monthly Balance PKR 50,001 to PKR 1,000,000

  • Calculated Daily Product Basis
  • Paid Monthly

Tier 4: Avg. Monthly Balance Above PKR 1,000,000

  • Calculated Daily Product Basis
  • Paid Monthly

Under this structure, an average monthly balance of PKR 75,000 would fall under Tier 3 – eligible for monthly profit payout calculated daily. The higher the tier, the faster the payout frequency.

As evident, maintaining higher account balances results in higher returns owing to faster profit computation and payout. The interest tiers are thus an incentive for disciplined saving and parking surplus funds in the Bachat Account.

MCB Aitemaad Savings Tiers

The MCB Aitemaad Savings Account targets farmers, rural account holders, and senior citizens. Like the Bachat Account, profit earning is linked to average monthly balances across four interest tiers:

Tier 1: Avg. Monthly Balance up to PKR 10,000

  • No profit paid

Tier 2: Avg. Monthly Balance PKR 10,001 to PKR 1 Lac

  • Calculated Daily Product Basis
  • Paid Half Yearly

Tier 3: Avg. Monthly Balance PKR 1 Lac to PKR 2 Lacs

  • Calculated Daily Product Basis
  • Paid Quarterly

Tier 4: Avg. Monthly Balance Above PKR 2 Lacs

  • Calculated Daily Product Basis
  • Paid Monthly

Under Tier 2, crossing the minimum average balance of PKR 10,001 starts earning half-yearly returns for customers. Profit payout frequency increases for higher tiers – encouraging maintaining larger balances to earn higher returns.

This structure suits the target groups who may have uneven cash flows from agriculture or small businesses. The half-yearly and quarterly payouts are aligned with seasonal business cycles.

MCB Pakistan Remittance Initiative Account

MCB Bank also offers innovative savings accounts targeted for overseas Pakistanis to facilitate sending remittances.

The MCB Pakistan Remittance Initiative (PRI) account provides account holders four interest tiers with corresponding benefits:

Tier 1: Avg. Monthly Balance up to PKR 5,000

  • No minimum balance
  • No profit paid
  • Free fund transfers

Tier 2: Avg. Monthly Balance PKR 5,001 to PKR 50,000

  • Internet & mobile banking
  • Free fund transfers
  • Calculate Daily Product Basis
  • Paid Half Yearly

Tier 3: Avg. Monthly Balance PKR 50,001 to PKR 500,000

  • Internet & mobile banking
  • Free fund transfers
  • Free debit card
  • Calculate Daily Product Basis
  • Paid Quarterly

Tier 4: Avg. Monthly Balance Above PKR 500,000

  • Internet & mobile banking
  • Free fund transfers
  • Free debit card
  • Free credit card
  • Locker facility optional
  • Calculate Daily Product Basis
  • Paid Monthly

Customers under higher average balance tiers get added benefits like free cards, transfers, and internet banking – reducing transaction costs. The quarterly and monthly calculation and payout of profits is also faster.

Overseas account holders are thus encouraged to remit more funds into the account to enter higher tiers and maximize returns along with other benefits.

Also read: Islamic banks apply Mudarabah

Conclusion

From individual savings accounts to special accounts targeting priority sectors, MCB Bank relies extensively on interest tiers linked to average balances. This provides benefits over conventional fixed interest rate savings accounts in multiple ways.

Customers earn higher returns by maintaining larger account balances due to faster profit computation cycles and payout frequency. It promotes financial discipline and inculcates the savings habit which is essential for a stable economy. Progressive benefits in higher tiers also reduce transaction costs which further benefit account holders.

By aligning savings returns to account usage, MCB Bank also reduces inactive funds which can then be disbursed for productive investments. Overall, this system of interest tiers balanced across different savings objectives makes MCB Bank a competitive choice for customers seeking Shariah-compliant returns.

Latest Posts

Leave a Comment