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Banks Adjust Deposit and Loan Rates in September 2023
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Banks increased their deposit rates while slightly reducing <a href="https://www.archyde.com/analysis-how-bad-is-the-real-estate-market-in-china-debt-defaults-mortgage-loan-cuts-pboc-cuts-interest-rates/" title="Analysis: How bad is the real estate market in China | Debt defaults | Mortgage loan cuts | PBOC cuts interest rates“>loan rates in September 2023.
According to data from the Bank of Greece, this adjustment resulted in a narrowing margin between deposit and loan rates, falling to 5.72% from 6.35% in the previous month. The weighted average interest rate on new deposits rose to 0.43%, whereas the interest rate on new loans decreased to 6.15%.
Details of Deposit Rates
The average interest rate on overnight deposits from households remained steady at 0.03%. Meanwhile, the corporate overnight deposit rate was nearly unchanged at 0.17%. For deposits with an agreed term of up to 1 year, the average interest rate from households increased by 17 basis points to 1.73%, while the corporate rate rose by 15 basis points to 2.85%.
Insights on Loan Rates
In terms of loans, the average interest rate on consumer loans without a fixed term, which includes credit card loans and overdrafts, remained stable at 14.79%.
- The average interest rate on consumer loans with a fixed term and floating rate decreased significantly by 121 basis points, now standing at 12.19%.
- Variable rate mortgage interest rates saw a slight increase of 39 basis points, reaching 4.42%.
- The average interest rate on business loans without a fixed term increased marginally to 6.76%, up from 6.73% last month. In contrast, the rate on fixed-term business loans rose by 5 basis points to 7.77%.
- New fixed-term and variable-rate business loans saw a decrease of 31 basis points in September, now at 6.04%, while rates for fixed-term floating loans to small and medium enterprises (SMEs) remained stable at 6.10%.
Loan Rate Structure by Amount
Breaking down interest rates based on loan amounts, it is observed that:
- For loans up to €250,000, the average interest rate increased by 8 basis points to 5.76%.
- For loans ranging from €250,001 to €1 million, there was a 9 basis point increase, bringing the rate to 6.06%.
- Conversely, loans over €1 million experienced a decrease of 34 basis points, maintaining a rate of 6.06%.
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Loan rates, which can be beneficial for consumers looking to save more while borrowing less.
Several banks revised their deposit interest rates upwards in response to growing competition and the need to attract more customers. Simultaneously, the reduction in loan rates reflects a strategic move to encourage borrowing, particularly in the wake of an economic environment that favors investment and spending.
Experts believe these adjustments indicate a healthy banking sector where institutions are balancing the need to remain attractive to depositors while also fostering lending activities. As a result, consumers may find better opportunities for saving and borrowing in the coming months.
If you are considering saving or taking out a loan, it may be worthwhile to shop around for the best rates available, as these adjustments could impact overall financial strategies.
Stay informed on these trends, as they can affect not only individual finances but also broader economic conditions in the region.
