In the spring of 2019, the largest banks in Russia headed for a reduction in deposit rates. Experts are already voicing preliminary forecasts for 2020 regarding whether the decline will last and what will happen to bank deposits. Despite low interest rates, Russians still prefer to accumulate savings in deposit accounts. Are citizens' trust in banks justified and is it possible to save money from inflation, analysts understand.
Government course
Over the past few years, the country's leadership has been pursuing a course aimed at lowering the key rate. Keeping it at the same level or reducing it is possible only with low inflation and a stable economic environment. In 2018 and early 2019, conditions were favorable, and the downward trend continued.
According to the press service of the Central Bank of the Russian Federation, if the situation develops in accordance with the basic forecast, the decline may begin in the third quarter of 2019. The Bank of Russia has announced a forecast to reduce the key rate by 0.25% (up to 7%). Moreover, from the middle of 2020, a transition to a neutral monetary policy is not ruled out.
Implementation of state programs falls on 2019-2025. A large number of launched social projects are directly associated with low interest rates on loans. This means that the relevance of cheap loans and low-cost deposits, as a result of the low key rate, will continue for the next few years.
Note: According to monitoring by the Central Bank of Russia, the average rate of dozens of the largest banks on deposits for individuals at the end of 2019 may approach 7%.
What determines the profitability of deposits
The interest on ruble deposits in Russian credit organizations directly depends on the key rate of the Central Bank. The Board of Directors of the Bank of Russia makes a decision on the amount of interest and its duration. Commercial banks take loans from the Central Bank precisely at this percentage. Therefore, to offer the client more than the size of the key rate means the work of the bank at a loss. Hence the dependence, which is clearly monitored - the higher the key rate, the higher the percentage of deposits. The calculation of annual interest on loans in commercial banks also depends on it. Low key rate - a guarantee of cheap loans for the population.
In addition, the percentage paid by banks to customers for the allocation of funds depends on the following indicators:
- Economic situation. The higher the growth rate of the economy, the higher the demand for money and the higher the rate. An economic recession always results in a noticeable reduction in rates.
- The stability of the ruble. Reliable national currency allows banks to replenish their resources at a lower percentage. The weakening of the ruble or rumors of a possible collapse of the currency respond to the cost of deposits.
- The economic situation of a particular credit institution. Currency turnover, the ratio of the terms for attracting funds and the periods for which money is placed, the desire to increase the loan portfolio - all these are indirect factors affecting the size of deposit interest.
The conditions in which all Russian banks operate are similar, and therefore there can be no big difference in proposals for opening deposits. In addition, fierce competition leads to a gradual equalization of deposit interest.
On a note. According to statistics, the population of Russia trusts their money to such banks: Sberbank, Russian Agricultural Bank, VTB, Gazprombank, Moscow Credit Bank, Alfa Bank, Otkritie FC Bank.The ruble turnover of these credit organizations compares favorably with competitors.
Expert Forecasts
According to most experts, the key rate of the Central Bank in 2020 will continue to decline, which will inevitably lead to cheaper ruble deposits. It is impossible to predict exactly what the decline will be in 2020, but it is quite possible to catch the main trends for economists today. An analyst at Finam Group believes that deposits will lose profitability already at the end of 2019. A prerequisite for this will be the expected reduction in the key rate of the Bank of Russia. Most likely, the downward movement will be about 0.25%.
What awaits depositors was also predicted by analysts at the independent agency Ratings lab. According to the calculations of the methodologists, in January 2020, rates will decrease by 0.85%. In the second quarter, a temporary increase of 0.5% is possible as part of spring promotions to attract customers. In the future, according to the assumptions of the agency’s economists, deposits will become cheaper until late autumn. The maximum decline is expected in August 2020 (-1.25%). The opportunity to profitably invest in Russians, according to Ratings lab forecasts, will appear closer to the New Year holidays.
One of the leaders of Otkritie Bank Alexander Borodkin is convinced that rates will continue to move down. The reduction will be smooth, stress-free. “The deposit market is very competitive. A change in rates by one of the major players usually leads to fluctuations in the entire market, which will continue until all players take their usual position, which allows them to attract the required volume at the minimum rate, ”the analyst believes.
The Press Service of the Central Bank of the Russian Federation, in turn, explains that one or another decision regarding the rate will be made based on the dynamics of inflation, as well as taking into account risks from external conditions and the reaction of financial markets to them.
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