The volume of two-year or three-year deposits topped 10 billion lei (EUR2.3 billion) in late November 2013, with the growth pace speeding up against previous months, show Romanian central bank data. The move came as interest rates for short-term deposits went down.
The month-on-month increase reached the equivalent of RON300 million, double compared with October and September. Year-on-year, deposits with a maturity term of more than a year swell by 26%, compared to the less than 5% increase posted by household deposits as a whole.
“Individuals’ long-term deposits have gained steam in recent months amid falling inter-banking interests. Thus, consumers have preferred to set up long-term deposits in a bid to raise the yield of investments,” comments Mihai Patrulescu, senior economist with UniCredit Tiriac.
The best interest rate for a two-year deposit now stands at 5% per year, while a 3-month deposit carries a 4.4% interest per annum at the highest.
Deposits maturing in more than a year have come to account for 10% of household deposits, almost two percentage points above the level of late 2012. Overall, the households hold time deposits worth some RON103 billion (EUR23 billion).
The need to close the gap between resources raised on short term and loans granted on long term prompted banks to launch a rising number of long-term saving products. However, bankers’ strategy has not paid immediately given that short-term products still account for 90% in the volume of deposits.
(English version by Catalina Apostoiu)