The Czech banks raise interest rates on savings accounts

Banks continue to make mortgages more expensive after Thursday’s sharp rate hike by the Czech National Bank, but they have finally raised interest rates on savings accounts. Higher interest rates have been announced by Česká Spořitelna, Air Bank, Creditas, and Trinity Bank.

For example, Air Bank is increasing the bonus interest on savings accounts from 0.75% per year to 1.5% for deposits up to CZK 250,000 as of Monday, November 22. “The client can get this interest rate easily. It is enough to pay five times a month with a card for any purchase,” Jana Pokorná, spokeswoman for Air Bank, commented. She added that the bank would continue to pay interest at 0.1 percent per year on savings account deposits from CZK 250,000 to CZK 1 million. Deposits above CZK 1 million are no longer charged interest at all.

Also, on Friday, Česká Spořitelna announced that from December, it would increase the interest rate on savings accounts from 0.2 to 1.5%for clients with a Plus account and clients of Erste Premier and Erste Private Banking.

Creditas will raise interest rates on savings products next week in response to the CNB’s moves too. The new rate for its savings account will be 2% per year for the part of the deposit up to CZK 350,000 and 1% for the part of the deposit above this limit. The rate for savings deposits with one month’s notice will be up to 2.1%. “The rates will also become more attractive, for example, for time deposits,” the bank promises. Trinity Bank is also following the same example. It is raising the rate on its savings account to 2.08% per year, advertising that it is now the first bank to offer the possibility to save without any limit on the amount of the deposit and any other conditions while having the funds available at any time.

From November 10, another bank, ČSOB, will increase the interest rate on its primary savings and term accounts. The interest rate for savings with Bonus, recently established via the SOB Smart app, will be 1.5% for the first three months, up from 1% previously. The annual term deposit, which includes bank accounts for fixed-term deposits with a clear return, will increase by 2%.

Even so, Czech bank deposits will continue to depreciate significantly in real terms because of the annual inflation rate of around 7% that the central bank predicts for the coming winter. In the fight against rising inflation, savers willing to commit to time fixation and take advantage of long-term products will lose less money. 

“While term deposits confirm a strong correlation with the set rates in the economy and banks generally react quickly, interest rates on savings accounts are rising only very slowly, according to the Portu analyst, Vratislav Zámiš.