If you dabble in bank deposits, which are essentially just a pleasure rather than a way to actually make money or save money, you’ll probably notice that the most profitable deposit terms are between two and four months. This may seem odd to say the least to someone used to opening multi-year deposits at once, but the reason for this is central bank monetary policy, which is the overestimation and gradual reduction of key interest rates on which deposits and Treasury yields depend.
Image source: ChatGPT.
As the central bank has continued to cut key interest rates every month or every two months for the past year and a half, from 0.25 to 2 basis points, banks have also obtained reinsurance by offering deposits at the highest interest rates during the above-mentioned short-term periods. Recently, the central bank did not further lower the “key” and maintained the annual interest rate at 14%. The banking sector reacted quickly, with major banks including VTB reportedly raising ruble long-term deposit rates.
how write red blood cellbank deposits of up to one and a half years can now be issued at interest rates of 13.7% per annum or even higher – if you meet the conditions of certain bank loyalty programs.
Whether this means Russian credit agencies have received information that the central bank will actually freeze the key interest rate at 14% next year is difficult to say, and we will only find out at the next regulator’s board meeting. But one thing is absolutely clear: there will clearly be more people willing to take advantage of the opportunity to open long-term deposits at 13.7% instead of the current reality of 11-12% for 2-4 months.