Deposit rates fell to the lowest level in a year and a half

The average size of maximum interest rates on deposits in the 10 largest (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) Bank of Russia by the beginning of April has fallen to 9,649% annual, follows from materials of the Central Bank. The current value of the index is the lowest since mid-October 2014: then the bet size was down to 9,607% per annum.

In late 2014, after the Central Bank raised its key interest rate to 17%, the largest banks were actively offering customers the deposits with interest rates above 15% per annum. The average rate then for 10 days, jumped by almost half, and by the end of December reached the level of 15,635%. In small and medium-size banks interest rates on deposits and even exceeded 20% per annum.

After the Central Bank started to reduce the key rate, began to fall and interest rates on deposits. And even the refusal of the Central Bank to continue lowering the key interest rate (from August 2015 it is fixed at 11%) has not changed the situation: the big banks continue lowering rates on deposits over the past few months.

On 9 April, the head of the Central Bank Elvira Nabiullina on air of the program “Vesti on Saturday” said that the Bank of Russia plans to continue to reduce the key rate, but only when this will not lead to inflation. “We certainly understand that the availability of credit is low, interest rates are quite high for our businesses. And we intend to reduce the key rate, but not at the expense of inflation. We should not allow the situation when we bet will reduce, and inflation will grow”, — said Nabiullina.

At the end of December 2015 the average size of the most cost-effective rates on deposits in the 10 largest Russian banks exceeded 10%, however, in February dropped below 9.8%.

It was previously reported that in the last month 8 of the 15 largest banks have reduced interest rates on ruble deposits. Most notably the rates dropped on deposits for a period of 1.5 years and 2.5 years (and -0,62 -0,64%, respectively). On deposits for shorter terms the decline is less noticeable. For example, the average rate on deposits for six months today is from 9.23%, which is 0.25 percentage points lower than last month. According to the Vice-President, Director of passive, insurance and investment products of the Bank “Opening” Vadim Pogosian, reducing the yield of ruble deposits is due to the fact that expensive money the banks now do not need. “Now is not the period when everything at any cost is ready to fight for volumes,” he says.