The decline in the volume of deposits came as a result of the rising appetite for spending among consumers and the very low interest rates banks have been offering.
Average interest on new leu deposits dropped to less than 1% in August or 0.95% per annum, an all-time low after July, when it stood at 1.01%. However, the new deposit volume in the first eight months of the year is higher than in the corresponding period of 2007 and 2008, despite the very low interest rates.
Banks are offering customers 0.3% to 1.7% per annum for a new 5,000 leu (about EUR1,100) deposit, which means RON0.03 to RON17 per year. Some banks charge a fee for withdrawal or for making the deposit, which lowers the already low profit even further.
Romanian consumers who save money usually choose maturities of less than one year. About 40% of the deposits made in January-August, RON51 billion, were due in less than one year. Average interest rate for deposits for up to one year is 0.95% per annum, while the one and two-year deposits may earn holders as much as 1.71% per annum. Deposits maturing in more than two years get 0.93% interest per annum. (EUR1=RON4.5016)
(English version by Loredana Fratila-Cristescu)