Experts believe the law to abolish the long-term deposit tax is very likely to pass before the close of 2024. This expectation came from Andrei Loboda, an economist and communications director at BitRiver, who spoke about the potential changes with socialbites.ca. The move is expected to influence household finances across the country and could have a meaningful impact on how Russians manage their savings and plan for the future.
According to Loboda, eliminating the tax on long-term deposits would encourage people to save more over extended periods. It could help curb inflation by slowing impulse spending and provide a broader safety net for families as economic conditions shift. From a public policy standpoint, the shift could be advantageous for the state as well, especially if it helps stabilize consumer behavior and supports a more resilient financial system in the face of changing currency dynamics.
Recent comments from the expert suggest that the budget would not suffer substantial losses because many Russians maintain deposit balances for six months to a year. The expectation is that if the tax is removed, banks might see a coordinated move toward longer-term savings products, with longer maturities gradually gaining traction within the total deposit mix. It is anticipated that the share of long-term deposits could rise to about 10% of all deposits, influenced by a robust ruble policy and a favorable rate environment that makes longer commitments more attractive to savers. In scenarios where the ruble experiences renewed depreciation, investors might turn to other instruments with shorter investment horizons, seeking liquidity and flexibility.
Meanwhile, on February 5, the Deputy Chairman of the Federation Council voiced support for the Ministry of Finance’s proposal to abolish income tax on long-term deposits. The idea, which the ministry presented in September, aims to stimulate demand for these deposits. Although no final decision has been made, the momentum behind the initiative indicates a potential shift in the fiscal treatment of savings instruments and signals a broader push to encourage household participation in longer-term financial products.
Previously, analysts explored how demand for long-term bank deposits could evolve under such a policy change. They noted that if the tax break goes through, savers may be more inclined to lock funds away for extended periods, strengthening banks’ capacity to mobilize stable, low-cost funds. This could also influence the structure of deposit portfolios nationwide, nudging financial institutions to develop and promote more diverse long-duration options that align with various risk profiles and savings horizons. The policy debate remains a focal point for financial planners and households as they weigh the tradeoffs between liquidity, safety, and potential returns in evolving macroeconomic conditions.