Speculation is mounting that Egypt’s largest public banks, the National Bank of Egypt (NBE) and Banque Misr, may issue new high‑yield certificates of deposit (CDs), following the maturity of their previous offering and the Central Bank of Egypt’s (CBE) late‑December decision to cut interest rates.
A portion of the one‑year CDs issued by the National Bank of Egypt and Banque Misr at the start of 2024, and offered through April 2025, is set to mature between January and April this year.
The certificates offered a monthly return of 22.5 per cent and an annual return of 25 per cent, wetting the appetite of the public, with total investments in these CDs during the 16‑month subscription period estimated at LE1.3 trillion.
The returns are much higher than those otherwise currently available to depositors, and the gap is expected to widen further as the CBE moves towards additional interest-rate cuts.
At its most recent meeting, the CBE’s Monetary Policy Committee (MPC) cut interest rates by one percentage point, bringing the overnight deposit and lending rates to 20 per cent and 21 per cent, respectively.
The move brings the overall cuts in interest rates during 2025 to 7.25 per cent from last April, following an earlier reduction from historically high levels.
The CBE uses interest rates as a key policy tool to control inflation, lowering rates as inflation eases and raising them when price pressures intensify. Egypt’s inflation rates followed a downward trend in most of 2025.
A large portion of Egyptian households and pensioners invest in CDs as they are fixed-income instruments with relatively high yields compared to the interest rate on deposits. They are also risk-free.
Mohamed Hassan, managing director of Alpha, said it is difficult for the state-owned banks to issue high-yield CDs at present, as the CBE moves towards lowering interest rates. He noted that people are more likely to turn to the CDs currently available at the banks, whose returns he described as “reasonable”.
The interest rate on the NBE’s three-year platinum certificate with a monthly return stand at 16 per cent, while those with annual returns offer 22 per cent, 17.5 per cent, and 13 per cent.
The NBE also offers a one-year CD with a fixed monthly return and an interest rate of 14 per cent.
Hassan argued that the sharp rises seen in gold prices and real estate show that investment in CDs has delivered the lowest returns by comparison. He believes that a large portion of the liquidity generated by maturing certificates will move outside the banking sector, with some directed towards real-estate investment and a larger share flowing into gold, amid expectations of further gold price increases over the year.
He anticipates that a smaller portion of these funds will be channelled into the stock market.
A report by US investment bank JP Morgan on market outlooks for 2026, issued on 9 December, stated that international gold prices would record a strong rise this year, reaching around $5,000 per ounce by the fourth quarter, with an annual average estimated at approximately $4,753 per ounce.
Hassan advised people with limited experience in stock market investment to place their funds in equity investment funds, due to their ability to deliver good returns.
He noted that returns on these funds over the past three years have ranged between 150 and 200 per cent, compared with around 25 per cent from CDs.
Hani Tawfik, an investment expert, said that the majority of CD holders lack the capacity to invest in alternative instruments, and that most depositors will therefore turn to other CDs. He advised allocating 25 per cent of an investment portfolio to silver and gold as safe havens, in the light of the tensions that have emerged since the beginning of the year.
Tawfik noted, however, that this option will not be available to all certificate holders, as most of them rely on a regular income from their investments and cannot afford to forgo it.
He also expects that only around five to 10 per cent of this liquidity will be directed towards stock market investment, given that certificate investors tend to be traditional savers who are not well versed in dealing with the stock market.
Hani Genena, head of research at Al-Ahly Pharos, pointed out that the liquidity expected from the maturity of the CDs will be reinjected into the banking sector, amid relative stability in the prices of most goods and a depreciation in the value of the dollar, alongside stagnation in real estate and durable goods.
As a result, he argued, investors seeking higher returns would have to turn to riskier investment instruments. However, since the majority of depositors are pensioners or long-term certificate holders, most of the funds are likely to be reinvested in CDs, even if returns are lower.
Genena added that a segment of younger depositors, or those at an early stage in their working lives, may opt for the stock market or gold.
He expects the main stock market index to rise to around 50,000 points this year, with some shares projected to gain 50 per cent or more. He also noted that some depositors will approach gold for investment purposes, given the sharp rise it recorded during 2025.
He believes there is no cause for concern that the funds will trigger an inflationary wave or lead to a rise in commodity prices, noting that all forecasts point to a downward trend in prices.
* A version of this article appears in print in the 8 January, 2026 edition of Al-Ahram Weekly
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