Interest Rates on Time Deposits Decreasing Gradually

Interest rates on time deposits are slowly declining, similar to savings accounts. However, depending on the length of the “fixation,” rates approaching the five percent mark can still be obtained. Money on time deposits is stored for a predetermined period, during which it is usually impossible to dispose of it without penalties.

Banka Creditas, for example, can attain an annual interest rate of 4.1 per cent with a six-month deposit. However, in January, it was 5.6 per cent; precisely a year ago, it was 5.8 per cent. Similarly, at UniCredit Bank, it is possible to get an annual interest rate of 4.4 per cent with a three-month deposit. But at the beginning of the year, it was five per cent. Of course, this does not always apply because, for example, this financial institution slightly raised the rate for a one-month deposit. This was also the case with ČSOB for this length. But the decrease is more common.

The decline is far from over. Moneta Money Bank is planning to lower interest rates on Monday. For example, interest rates here will drop from 4.7 to 4.3 per cent for a three-month deposit and from 3.5 to 3.2 per cent for a year. “We are thus responding to the current development in the market,” said spokesperson Lucie Leixnerová.

Many banks usually justify this procedure with the step of the central bank. “The reason is mainly the reduction of the Czech National Bank (ČNB), based on which we also react,” stated Petr Plocek from UniCredit Bank. Interest rates on time deposits, like savings accounts, are governed by the introductory interest rate set by central bankers. During high inflation, they gradually increased it to dampen high prices.