average deposit rates in Russia exceeded 21.5% per annum –

The yield on bank deposits in Russia has reached its highest level for the entire period of observation. This conclusion follows from the updated materials of the Central Bank.

According to the regulator, the average maximum rate on ruble deposits in the country’s ten largest credit institutions increased to 21.56% per annum.

Over the past year, Russian banks have increased their interest rates on deposits by more than one and a half times. Thus, according to the materials of the Central Bank, in November 2023 the national average was about 13.64%.

“The record growth in interest rates on deposits in Russia is explained primarily by an increase in the key rate of the Central Bank. With the current monetary policy (MCP) of the regulator, banks often offer their clients deposits at 25% per annum,” Alexander Shneiderman, head of the sales and customer support department at Alfa-Forex, told RT.

Let us recall that in the second half of last year, to combat rising prices for goods and services, the Central Bank more than doubled the key rate – from 7.5 to 16% per annum. In July 2024, the Central Bank increased it to 18%, in September to 19%, and in October it set it at 21%.

Due to this tightening of monetary policy, loans in the country become more expensive, and the profitability of bank deposits increases. As a result, over time, people and businesses begin to borrow less, spend less and save more, overall economic activity declines, and price pressure should soon subside.

According to the latest data from the Ministry of Economic Development, the annual inflation rate in Russia is still more than double the authorities’ target of 4% and hovers around 8.8%. According to the Central Bank’s forecast, by the end of 2024 the value will be 8-8.5%, but already in 2025 it should drop to 4.5-5%. To achieve this, the regulator plans to maintain tight monetary conditions for now and may even raise the rate again at the next meeting on December 20.

“Board of Directors (of the Central Bank. — RT) allows for the possibility of raising the rate at the next meeting. But I want to note that even this signal does not predetermine the December decision. It will be adopted based on the picture of the economy that the board of directors will see in mid-December,” TASS quotes Central Bank Deputy Chairman Alexei Zabotkin.

Nevertheless, today many banks in Russia offer their clients deposits at 22-25% per annum. Moreover, in some cases the value reaches 30%, according to data from the Compare service.

“If the key rate rises again by the end of 2024, this will certainly affect interest on deposits, and already in the first quarter of 2025 banks may come with even more favorable offers for their clients. At the same time, as the monetary policy tightens among financial institutions, competition for depositors also increases, who have the opportunity to choose comfortable conditions for placing funds,” Maria Tatarintseva, product manager for “Deposits” at Compare, told RT.

Moreover, the attractiveness of bank deposits was also influenced by the abolition of commissions for transfers to oneself through the fast payment system (FPS). This opinion was shared with RT by the director of the retail lending department at Tsifra Bank, Yuri Eidinov.

Let us remind you that from May 1, Russians have the opportunity to send up to 30 million rubles per month to their accounts in different banks for free. Previously, the limit was only 100 thousand rubles, and financial institutions charged an additional fee for exceeding it. According to Eidinov, after the innovations came into force, banks began to compete more actively with each other and more often offer more favorable interest rates on deposits to retain customer funds.

Inflation protection

Against the background of growing profitability of bank deposits, Central Bank experts note an active influx of household funds into deposits. According to the latest data from the regulator, in October 2024, the volume of Russians’ money in accounts with credit institutions increased by approximately 700 billion rubles and reached 52.9 trillion.

“Fixed-term deposits of the population continue to increase due to rising rates… In total, since the beginning of the year, household funds have grown by 7.4 trillion rubles (+16.3%), which is more than twice the result for the same period last year ( +3.6 trillion rubles, +9.6%),” says the Central Bank’s study.

As noted by the regulator, today deposits still remain the most understandable and safe tool for saving funds, and the money on them is insured by the state up to 1.4 million rubles. At the same time, current deposit rates make it possible not only to protect savings from inflation, but also to earn money, noted Yuri Eidinov.

“Current rates on deposits for one year reach the level of 20-23% per annum, while the average inflation rate for 2025 is predicted by the Central Bank in the range of 6.1-6.8%. Thus, even if real inflation turns out to be higher than forecast, deposits issued under current conditions will at least preserve the purchasing power of funds for clients, and in a positive scenario they will allow them to earn real income,” Eidinov emphasized.