The longer the term of the deposit, the more profitable it is for depositors.
Over the past month, the largest bank in Ukraine has reduced the profitability of deposits. Which banks still offer favorable deposit rates and how the guaranteed amount of deposits can change?
Deposit rates overview
The journalists of Channel 24 calculated the average deposit rate based on the proposals of the 10 largest banks in Ukraine. The list of banks and programs is given at the end of the material.
The longer the term of the deposit, the more profitable it is for depositors. The average rate on a deposit account for 12 months or more is 7.18% per annum. But the least profitable are deposits for 3-6 months — only 6.15% per annum. True, not all banks offer deposits for up to 3 months.
The most favorable deposit rates
The most advantageous offer at Universal Bank. The deposit line without the right to early return offers a rate of 9.5% per annum for a period from 271 to 735 days. Conditionally for a period of 9-24 months. By the way, monobank operates on the basis of Universal Bank — where the deposit rate is slightly higher for a period of one year — 10%. We add that deposit rates have not changed since the last review in July.
Alfa-Bank also did not change deposit rates and offers 8% per annum for deposits with a maturity of 6 to 12 months and 9% per annum for deposits with a duration of 18-24 months.
The third place in terms of profitability of deposit rates is taken by FUIB. Deposits lasting a year give 8.5% of annual income. For a shorter period — 8.2% (9 months), 8% (6 months) and 7.5% per annum (3 months).
The only bank among the top ten that has changed deposit rates over the past month is Privatbank:
- Instead of 6% for 3-6 months, Ukrainians can expect 5.5% annual yield.
- Instead of 6.5% for a period of 6 to 9 months, the bank offers 6% per annum.
- The profitability of deposits for 9-12 months has also decreased by 0.5% — now it is 7%.
- Deposits for more than a year will bring 6.5% per annum instead of 7% in July.
Please note that Ukrainians pay 19.5% tax on the income from the deposit. Therefore, the actual profitability of these deposits is lower.
Deposit rates change
At the beginning of 2020, the UIRD index on deposits for 12 months in hryvnia was 15.18% per annum, and as of August 9 of this year — 8.36%. However, over the past month, this index has risen slightly (on July 2, it was at 8.27%) — thanks to smaller banks. Indeed, among the large banks, on the basis of which the journalists of Channel 24 made a rating, none of them raised the rates, but one bank reduced the rates, the rest remained unchanged.
UIRD Index
To calculate the index, the bank's nominal rates for a «classic» deposit are used (a new depositor, without the right to replenishment, with interest payments at the end of the term). The UIRD index is calculated on the basis of deposit rates announced by banks for periods of 3, 6, 9 and 12 months in the following currencies: hryvnia, US dollars, euros.
The National Bank expects that in the coming months, the profitability of deposits will begin to grow. This is because the NBU raised the discount rate from 7.5% to 8%.
After today's decision, the rates on deposits will more actively respond to the increase in the discount rate,
— said the Deputy Chairman of the NBU Sergei Nikolaychuk during the briefing.
Guaranteed deposits
Now the state guarantees deposits of up to 200 thousand hryvnia from banks that are members of the FGVFL (Fund for Guaranteeing Deposits of Individuals). That is, in the event of a bank bankruptcy, depositors return all their money from the deposit, or at least 200 thousand, if the amount was higher.
Bill No. 5542-1, which has already been adopted in the first reading, can raise the amount of the guaranteed deposit to 400 thousand hryvnia , and from January 1, 2023 — up to 600 thousand hryvnia .
The review was based on proposals from 10 Ukrainian banks with the highest capitalization: Privatbank, Ukreximbank, Alfa-Bank, Ukrgasbank, FUIB, Raiffeisen Bank Aval, Ukrsibbank, Universal Bank, Credit Agricole, OTP Bank. Namely, classic deposits (without early refund and with interest payments at the end).