Increase interest rates deposits announced from next week bankswhich according to with information from “K” will be implemented in stages and will concern term deposits owned by households and businesses.

The increase will be in the order of half a unit and will be applied horizontally even for small deposits, for example. €5,000, but will be increased to 1% for larger amounts to encourage term deposits, which have fallen to historic lows. So the shores will pass part of his rise uriborcurrently at 1.8%, at its clients’ deposit rates, encouraging even small depositors to move from savings accounts to longer-term, 6- or 12-month closed accounts.

The “signal” to increase rates on deposits was given last week by the management of the Eurobank in the context of informing analysts about the results of the 9th month, estimating that banks will gradually transfer 60%-70% of the increase in euroboron to the deposit rates of their clients. According with information from “K”this trend will start to be felt immediately, the first increases will be announced from next week, and will gradually increase until the end of the year and the beginning of 2023, not taking into account further increases in euribor, which are projected to exceed 3% at the end of 2023 and begin to decline from the end 2024.

According to the same information, a gradual increase of more than 1% is possible, but these will be large amounts, over 5 million euros. It should be noted that in our country, the increase in interest rates was combined with periods of “economic anomaly”, when banks were faced with an outflow of deposits abroad, and, as bank sources explain, the announced increases will be modest and will not relate to the interest rate war that has been observed. for example, in 2012. However, they will be aimed at strengthening medium-term savings, mainly rewarding long-term ones.

Business and household time deposit balances at banks fell to a low today after the abundant and cheap liquidity introduced by the ECB in recent years kept interest rates in negative territory, pushing time deposit yields to historic lows of around 0.10%. . Thus, interest rates on time deposits were equal to those on savings accounts, since there was no benefit for depositors to keep their money in closed accounts. For this reason, out of 138.8 billion deposits of the population in banks, only 23.9 billion are in term accounts, when, for example, in 2019 the ratio of savings and term deposits was 1 to 1. which amount to 46.7 billion, of which 40, 3 billion overnight deposits, i.e. on checking accounts.

The deposit premium is not only a response to the rise in euro, which has led to an increase in the cost of borrowing for businesses and households, so far there has been no hedging of deposits. It is also necessary to maintain a high level of liquidity available to banks to finance the economy, after the end of the ECB’s TLTRO program and gradual repayments, which will begin at the end of the year and gradually peak in 2023-2024. Banks will have to replace some of this liquidity with sources other than the cheap ECB facility, such as interbanks, for example, and so they are turning back to their depositors, who are the main source of liquidity.