Abstract

City Bank is one of the oldest and finest commercial bank operating in Bangladesh which spread
it wings throughout the country. The report focuses on the interest rate in different account
provide by City bank and the interest rate in home loan and the term and condition of it. The
report is based on the data collected through personal interview as well as secondary data
collected from City bank website and other bank website to find out the interest rate on different
accounts.

City bank interest rate on different account and home loan Page 1
 Table of content

Serial No Content Page no

1 Abstract 1

2 Overview of city bank 3

Interest rate
3 3

Method of interest calculation:

4 4

Home Loan and its requirements

5 5

Final amounts by keeping Tk

100000 in savings & fixed deposit
6 6
account

7 Reference 7

City bank interest rate on different account and home loan Page 2
Overview of City Bank

City Bank is one of the oldest private Commercial Banks operating in Bangladesh which started
their operations in 1983. The Bank started its journey on 27th March 1983 through opening its
first branch at B. B. Avenue Branch in the capital, Dhaka city. It was the visionary
entrepreneurship of around 13 local businessmen who braved the immense uncertainties and
risks with courage and zeal with only Taka 3.4 crore worth of Capital, which now is a
respectable Taka 2311.78 crore as capital & reserve.

City Bank is among the very few local banks which do not follow the traditional, decentralized,
geographically managed, branch based business or profit model. Instead the bank manages its
business and operation vertically from the head office through 5 distinct Units namely

 Business Unit
 Branch Banking
 Risk Unit
 Operations Unit
 Support

Under a real-time online banking platform, these 5 distinct Units are supported at the back by a
robust service delivery or operations setup and also a smart IT Backbone. Such centralized
business segment based business & operating model ensure specialized treatment and services to
the bank's different customer segments.

Interest rate

Interest is the amount charged, expressed as a percentage of principal by a lender to a borrower

for using the asset. Interest rates are typically calculated on an annual basis, known as annual
percentage rate (APR). The City Bank provide different types of interest rate based on accounts
such as savings account, fixed deposit except current account to its depositors and these interest
rate is differ from based on the tenor of the account. City Bank also provides Home Loan and
they are the market leader of that section. The interest rates of City Bank on different accounts
are shown below:

City bank interest rate on different account and home loan Page 3
 Type of deposit Rate of interest Industry average*

Current Account Nil Nil

Basic Savings Account 3.25% 3.50%

Fixed deposit Account

3 months (Quarterly)
Below Tk 5.00 crore 6.00%
3.50%
Tk 5.00 crore and Above 6.50%
6 months (Half yearly)
Below Tk 5.00 crore 3.00%
4.75%
Tk 5.00 crore and Above 3.50%
12 months (Yearly)

Below Tk 10.00 crore 7.00%

5.00%
Tk 10.00 crore & Above 7.50%

Loan

Home Loan 8.00% 10.45%

*Industry average is calculated based on the interest rate of Agrani Bank, Janata Bank, Sonali
Bank, Rupali Bank, Basic Bank collected from respective website.

Fig: Interest rate of City Bank on different account

Method of interest calculation:

City Bank calculates interest on a compounding basis. They use the flat rate method, which
means if a loan is taken from City bank the interest will be calculated based on the principal
amount and no amount will be deducted from principal amount though the payment is given.
That means a borrower have to pay almost double interest rate is what he is promised at the
starting. The number of compounding depends on the tenor of the accounts. It may be monthly,
quarterly, half yearly and yearly. In case of savings account the maximum number of
compounding interest rates of City bank is two times in a year that means every 6 (six) months it
gives profits and after every six months the principal value add with the interest and become new

City bank interest rate on different account and home loan Page 4
principal for the next period and it continues until the account comes to an end. In case of FDR it
generally follows quarterly method but the maximum number of compounding it provides 12
times in a year and the interest rate depends on the amount which listed above.

Home Loan

City bank offers home loan and they are in the leading position in this arena. It offers home loan
relatively with a lower interest rate compared with other banks providing home loan in
Bangladesh. It gains the leading position through lower interest rate and the amount of financing
in home loan. It offers up to 70% financing where most other banks financing are up to 50%. It
also provides a wide range of facilities to its customer which listed below.

Product Features

 Loan amount ranging from BDT 5 lac to BDT 1.2 crore

 Repayment tenor is 1 year to 25 years.
 Maximum 5 phase disbursement is allowed.
 Financing up to 70% of property value
 Early settlement facility
 Loan against property
 No hidden cost

Processing Fee

 1% processing fee on any loan amount

 No processing fee on Takeover and enhancement facilities

Eligibility

Age Limit: 22 years to 65 years

Experience:

- Salaried Executive: Minimum 2 years experience including 6 months with current

employer.

City bank interest rate on different account and home loan Page 5
 - Professionals: 2 years experience of practice.

- Businessman: Minimum 3 years involvement in the same business.

Income Criteria:

 Salaried Executive/Professional: Minimum Tk. 40,000

 A/C Paid Salaried: Minimum Tk. 35,000

Final amounts by keeping tk100000

Savings Account:

If someone keeps bdt 100,000 in City bank for one year final amount the depositor will receive is
bdt 103,276.41 and in fixed deposit depositor will receive bdt 105,094.54. The calculation as
follows

Here, year (n) =1, principal amount (PV) = 100,000, interest rate i= 3.25%, number of periods
n=2, effective annual interest (EAR) rate is =0.0328=3.28%,

𝑖
So Future Value FV = PV (1+ 2) n×2

0.0325 1×2
= 100000(1+ )
2

= 103,276.41

FDR:

Year (n) = 1, principal amount (PV) = 100,000, interest rate i= 5.00%, number of periods n=4,
effective annual interest (EAR) rate is =0.051=5.1%,

𝑖
So Future Value FV = PV (1+4) n×4

0.05 1×4
= 100000 (1+ )
4

= 105,094.54

City bank interest rate on different account and home loan Page 6
Reference

 www.thecitybank.com
 www.bb.org.bd
 www.agranibank.org
 www.sonalibank.com.bd
 www.rupalibank.org
 www.basicbanklimited.com

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