Anaalysis: BENEDICT TEMBO
THE Financial Literacy week is an annual public awareness campaign conducted throughout the country to empower citizens to make smarter money choices.
The campaign covers a number of topics such as earning, insurance, investing and saving to give citizens the tools to make responsible financial decisions to suit their financial position.
This contributes to the vision of the National Strategy on Financial Education for Zambia for citizens to have the knowledge, understanding, skills and confidence to make prudent financial decisions for themselves, their families and their communities.
In Lusaka Province, the Financial Literacy Week 2019 exhibition took place at Kafue River Mall in Kafue where over 20 financial institutions, including banks, micro-finance, pensions and insurance companies exhibited various products and services, and gave smart financial advice to the members of the public.
During the commemoration of the Financial Literacy Week dubbed ‘Be Money Smart’, Indo- Zambia Bank used the occasion to launch the Bumi fixed deposit account designed for individuals and corporate entities.
The new product is aimed at inculcating a culture of saving at micro level while supporting the culture of saving by paying interest upfront to customers.
This is a fixed deposit account where interest is paid to the customer upfront.
The Bumi fixed deposit account is undoubtedly a very innovative financial product, which should have a significant buy-in by citizens wishing to save.
It will make a big difference to the usual bank offerings where they try as much as possible to utilise your money to the fullest and pay as little interest as possible.
In these hard economic times where liquidity is extremely tight, it is extremely helpful to have interest upfront as it is handy.
Besides, the upfront money can be invested to generate more money.
“It’s very significant especially for retirees and those employees who are on contracts and are entitled to gratuities. It’s significant for this group because they have a significant lump sum amount of money which they can invest,” says Copperbelt University lecturer in marketing and entrepreneurship Moffat Chawala.
Mr Chawala says the product is significant because it gives people an opportunity to invest their money and the return on investment is assured.
“It’s timely in the sense that it will afford people an opportunity to access the returns on their investment upfront and they can use that money for re-investment or to meet other day-to-day obligations,” he says.
The Bumi fixed deposit account is an attractive model and is a good incentive for people to invest knowing very well that they will access the return on investment upfront.
It also reduces the risk of having one’s money for a long period without having access to it.
“It also reduces the risk of having one’s money locked up for a long period without having access to it,” Mr Chawala says.
Indo-Zambia Bank managing director Maheshkumar Bansal explained that the Bumi Fixed Deposit Account is designed for individuals and corporate entities.
Mr Bansal said the account has a minimum initial deposit of K200 and that it and could be opened for periods of 90 days, 180 days and one year.
“Interest is credited immediately to the customer’s current, savings or corporate account immediately upon booking the Bumi fixed deposit contract. At maturity date, the customer is credited with the principal amount into their account.
“The Bumi Fixed Deposit Account offers comparative advantages to other term deposit accounts in that it offers attractive interest rates with an upfront payment of interest which enables the customer to use the funds to cater for immediate financial needs before the maturity of their entire fixed deposit,” he said.
Mr Bansal said the bank’s product and service offering was in line with this year’s Financial Literacy Week theme in that they provided various affordable accounts which offered low and affordable minimum deposit balances.
The author is editorials editor at the Zambia Daily Mail.
Anaalysis: BENEDICT TEMBO