Which banks have raised deposit interest rates?
According to their response to a request from socialbites.ca, deposit rates of at least 11 Russian banks in the top 50 in terms of assets have already increased. Terms VTB, Renaissance Bank, Gazprombank, Post-Bank, Otkritie, Uralsib, St. Petersburg and Dom.RF banks, Absolut-Bank, Alfa-Bank and Sovcombank. In these you can open a deposit of 11-12% per annum. From August 18, the Ural Bank for Reconstruction and Development will increase interest rates on savings accounts to a maximum of 12%. Plans to increase the profitability of deposits were announced by RNKB (part of the VTB group) and Asia-Pacific Bank.
Sberbank announced that the decision to increase the deposit rate was taken due to the Central Bank’s increase in the key interest rate to 12% and the possibility of further growth.
Natalia Tuchkova, head of the VTB “Savings” department, said that the decision of the Central Bank will lead to a further improvement of conditions for savings products. The throughput adjustment on these will average 70-80% of the size of the increase in key ratio.
He stated that banks will offer the most favorable conditions for “long” deposits.
“In the short term, interest rates will rise primarily on deposits of three to six months. Their return will be 10-12% annually. For longer-term deposits, rates most likely won’t change significantly until the end of September: many banks have already increased them, said Alexey Okhorzin, vice-chairman of the Post Bank board of directors. This perspective was supported by BCS Mir Investments stockbroker Mikhail Zeltser.
The press service of the financial market “Compare” announced that the increase in rates in the Russian banking market has not yet ended: not all players reacted to the decision of the Central Bank, and deposit conditions may change for another week.
When does the deposit open
Associate Professor of Finance for Sustainable Development, Russian University of Economics, says that first of all, Russians should focus on the deposits they already have. GV Plekhanov Maria Ermilova. So, now you need to see if an already open deposit has expired.
“If the deposit is at an interest rate that exceeds inflation, it would be less profitable to close it and shift it to a new deposit with a higher interest rate. Sergei Dubinin, ex-president of the Central Bank of the Russian Federation, in this case, the depositor can receive less money, because he will lose the interest already earned. In case the deposit is closed before maturity, an annual interest of 0.1% will be charged.
Dubinin does not expect a key increase in September 15 and a rise in deposit yields this fall.
“This increase in the loan ratio was necessary to reduce the panic in the market. I don’t think the same need will arise in the fall. Country authorities are likely to discuss standards for selling foreign exchange earnings with exporters. Money will begin to flow into the market. The ruble rate will be fixed in the range of 90-95 rubles per dollar,” he said.
Dubinin summarized, therefore, that the Central Bank would have no reason to raise the key interest rate and that banks had already included all possible scenarios in the current rate hike.
Dubinin noted that users should assess whether they will need money in the near future for certain expenses. If not, you can open a deposit – the conditions are now favorable.
Ermilova agrees that it is necessary to use the opportunity to earn passive income right now. So if you have money, you can open a deposit and then watch the key rate. According to him, in the current situation it is optimal to choose a short-term deposit, so that in case of further increases in rates, money can be shifted at a more favorable rate.
“In case of another increase in rates, which is not yet the base scenario, the deposit can be extended or reopened under the new conditions,” said Natalia Vashchelyuk, chief analyst at Sovcombank.
Tuchkova advised clients to be flexible in terms of savings – for example, immediately open a savings account and a time deposit. It will be possible to earn a high percentage on the deposit. Money that is important for the customer to keep can be deposited into a savings account. It allows you to withdraw amounts without losing interest. Tuçkova stated that after the Central Bank’s decision, interest rates for this product were also increased.
Zeltser believes it’s more profitable to pay attention to federal loan bonds with a longer-term investment horizon from six months. Rates on it are around 11% and bond prices are expected to be higher than the current price in 2024. In the case of OFZ, the ability to quickly sell your assets without significant losses is much higher than a deposit where you can lose interest, he explained.