What interest rates do banks and credit unions currently pay on deposits? | Business

If you do a good search right now, like three months ago, you can find an offer to make a deposit for 5 percent among credit unions. interest – this is how much credit union “Delta” agreed to pay customers for a 12-month time deposit on August 16.

However, the most generous offers from the banks have turned sour – in May, the highest amount offered was 4.15 percent. for a 12-month term deposit, and a total of six banks offered 4%. and higher interest rates. Meanwhile, BigBank (4.05%) and SME Bank (4%) offer the most attractive offers on the market for a term deposit of this period.

All other banks for 12 months. fixed deposit already offers less than 4%: “InBank” – 3.8%, “Mano bankas” – 3.75%, “Fjord bank” and “Finora Bank” – 3.6%, “Urbo bankas” ” – 3.5 percent.

Indelaii.lt/Deposit interest in banks in August

In the big banks, the offers are even more modest: Šiaulių bankas, in May for 12 months. time deposit offered 4%, now – 3.4%. The same now and 3 months ago. offered by Citadele Bank.

SEB Bank, May for 12 months. who paid deposits of 3.5 percent. interest, now offers 3 percent. Swedbank is paying the same 3 months ago. Meanwhile, Luminor bank, which paid 3.3% back in May, is now offering 2.9% for a 12-month deposit.

True, for 18 months deposits from smaller banks can get more offers for 4 percent. interest, but the big banks pay even less for such deposits.

Credit unions pay more

If you look around among credit unions, you can find better offers than those offered by banks – here for more than 4 percent. A variety of term deposits can be chosen at annual interest rates.

Indelaii.lt/Deposit interest rates in credit unions in August

Already next year, deposits will be less attractive

Sigita Pranckėnaitė, doctoral student of the Economics program of the ISM University of Management and Economics, in May 15min claimed that the peak of deposits was reached in 2023. at the end, and this year deposit interest is gradually decreasing.

It is likely that they will continue to decrease, as this is also influenced by the decisions of the European Central Bank (ECB). The ECB has been rapidly raising key interest rates since 2022 to combat rising inflation. in July until 2023 in September, and this summer they have already begun to reduce them.

Although so far the ECB only once 0.25 percent. point lowered the base interest rates, experts expect that we will see another interest rate cut this year.

Residents who have taken out loans with variable interest rates are waiting the most for the ECB’s decisions – the absolute majority of such people in Lithuania. However, Bigbank experts point out in a press release that this will affect not only those who take loans, but also those who have deposits. Higher base interest rates also mean higher interest rates on deposits, which Lithuanians have also started to actively use.

The latest data from the Bank of Lithuania show that the residents’ deposits have already reached 22.97 billion. euros, although at the same time in 2021 they reached only 18.86 billion. euros.

However, will we return to the times when credit institutions will not want to pay for deposits again? BigBank experts recall that after the 2008 crisis, everyone offered deposits for a while, but eventually most of the offers disappeared completely, and the offers of other banks were so unattractive that many simply forgot about the existence of deposits.

Ieva Rogozina, head of product development at Bigbank, believes that while some banks may maintain slightly higher interest rates in order to attract cheaper capital and customers, even if the ECB starts to lower interest rates, banks that do not need the funds from deposits as much, the interest rates on deposits rates will be reduced more aggressively.

“Some banks may refuse offers of the deposit part completely. Deposits are often one of the last means of attracting funds used by banks, so if other means look more attractive, deposits may even be completely abandoned,” she said.

The expert added that deposit interest rates may change not entirely in accordance with the actions of the ECB, as a lot depends on the business strategy chosen by the banks themselves.

123rf.com photo. /ECB building in Frankfurt am Main

By the way, ECB representatives have repeatedly admitted that previously up to 0%. the lowered base interest rates were a misstep and there are no plans to return to such low interest rates.

A survey of professional forecasters conducted by the ECB indicated that many analysts believe that base interest rates will reach 2.5 percent as early as 2026, but it is probably not worth expecting a lower level.

This is good news for those residents who like deposits as a means of saving.

“Nevertheless, deposit interest rates should not fall too low this time, and when inflation reaches 2 percent, the attractiveness of deposits should remain, as their interest rates will be higher than inflation,” I. Rogozina summarized the situation.