Deposit rates fell to the lowest level since October 2014

The average size of maximum interest rates on deposits in the 10 largest (in terms of attracting individuals ‘ deposits) banks of Russia in early February dropped to 9,759% annual, follows from materials of the Central Bank. So low, this indicator did not fall since the end of October 2014, when the bet size was estimated to be 9,715% per annum.

At the end of 2014, the banks after the Central Bank increased the key rate to 17%, have begun to raise rates on deposits, trying to solve at the expense of deposits of physical persons the problem of shortage of funds. A range of small and medium-sized banks was offering customers the deposits with interest rates above 20% per annum. Large banks acted more cautiously, however, in mid-December 2014 average maximum bids (if the calculation takes into account the deposits in the savings Bank, VTB 24, Bank of Moscow, Raiffeisenbank, Gazprombank, the Bank, alpha Bank, Bank “FC OTKRITIE”, Promsvyazbank and Rosselkhozbank) for the first time since 2009 has risen above 15% per annum. Just ten days rate increased almost one and a half times, and by the end of December reached the level of 15,635%.

For 2015 the Central Bank in a number of techniques have lowered the key rate from 17% to 11%, followed by the decreased rates on deposits. During the year the value of the average Bank in the top 10 maximum bet was reduced in the same half and at the beginning of January it fell below 10% per annum.

Analysts attribute the change in policy of the banks with the growing popularity of savings behavior on a large-scale transfer of population which earlier reported the Ministry of economic development. “Due to the fact that the people chose the tactics of the savings banks have no need to stimulate the flow of customers through rates,” noted analyst IK “SOVLINK” Olga Belenkaya.

The analyst of Raiffeisenbank Denis Poryvai notes that only in December 2015, the Russians took it to banks about 1 trillion rubles — money that is usually spent on gifts and travel during the Christmas holidays.

At the same time at the end of January 2015, the Central Bank made it easier for banks increase rates on deposits, raising the base level of profitability of ruble deposits, which are oriented commercial banks, setting interest rates on open for the population deposits. The excess of the certain Central Bank rates more than 2 percentage points involves an obligation to pay higher contributions to the Deposit insurance Fund.

According to calculations, the average rate on the 15 largest Russian banks in January 2016 fell from 8.8% to 8.6%. While stronger just dropped rates on short-term deposits, the yield on long-term (2-3 years) investments slightly decreased and the yield of deposits for the year, on the contrary, has grown by almost 0.1 p. p.