Russians Dissatisfied with Sharp Rate Cuts Are Reportedly Withdrawing Their Deposits
As expected, following the Central Bank`s key rate reduction in June from 21% to 20%, banks began a widespread decrease in interest rates on ruble deposits. Large Russian banks are leading this trend. On average, rates have decreased by 0.81-1.22% after the Central Bank`s «historic» decision. However, since the beginning of 2025, the decline has been more significant, reaching 2.75-3.81%.
For instance, the rate for 3-month deposits in banks from the «top twenty» is 18.77%. Rates decrease for longer terms: for a six-month deposit, it`s 18.08%, and for a one-year deposit, it`s 17.29%.
The maximum rate currently available is 19.5-20.5% per annum, but this comes with «special conditions» that must be strictly accepted. The minimum rates range from 17.2% down to 14.68%.
Where did that golden era go when deposit rates exceeded 20% per annum?
There are already reports that Russians, unhappy with such a sharp drop in interest rates, are withdrawing their deposits from banks en masse. But where will they invest their cash after saying goodbye to the credit organization? Under the mattress?
Nevertheless, today`s rates, even the minimum ones, are still higher than the official inflation rate (which is 9.6%). This means some profit will still accrue to the account, although it won`t be as high as many depositors had grown accustomed to. But good things must come to an end…
Another question is what will happen to interest rates by the end of the current year? Just a month or two ago, many experts expected rates to decrease, but not so sharply. They thought rates would be around 18-19% per annum by year-end. Reality has turned out differently. There are still a good 6 months left in the year, and minimum rates have already reached 14%.
Meanwhile, it appears the Central Bank is ready to further soften its monetary policy, which means the key rate will likely be reduced again in July. How will banks react to this step?
Financial analyst Sergey Drozdov doesn`t believe there has been a mass outflow of deposits from banks yet. After all, if a person closes an account before the deposit term ends, they lose their earned interest. It`s unlikely anyone would do this to their financial detriment.
«For now, most depositors are satisfied with the current level of rates,» he believes. «It`s certainly not the 22-23% it used to be, but you can still find a bank offering 18% for a one-year deposit. However, you need to keep in mind that the process has started: rates will continue to decrease. There`s a high probability that the Central Bank will lower the key rate again in July, and banks will anticipate this by lowering deposit rates even further. Still, if a person`s deposit term has ended, I wouldn`t advise them to withdraw the money. It makes sense to extend the account, even if it`s at the current not-so-high rates. In any case, the rate is one and a half to two times higher than official inflation, so your money won`t be `eaten up` by it.»
Financial analyst and candidate of economic sciences Mikhail Belyaev asserts that banks are not interested in keeping deposit rates high. They pay for this out of their profits, and why would they want to lose money?
«When the signal came from the regulator about lowering the key rate, banks gladly started reducing deposit rates,» the analyst says. «Supremely high rates cannot last forever, and people need to be psychologically prepared for this. We should be thankful for the period that gave us 20% plus.»
— So, what should Russians prepare for next?
«Currently, rates remain quite high. In my opinion, no other financial instruments can compete with bank interest rates. Nevertheless, I would recommend exploring alternative options. So that when deposit rates become uncomfortable, you can move funds into other financial instruments.»
— Which ones, for example?
«There are many instruments, but not all of them are suitable for the average citizen. For example, you can invest in real estate. However, that requires completely different levels of capital. Or work with securities. Here you should keep in mind that such actions involve high risks; you can `strike out` and end up in the red.»
Therefore, it`s better to use not just one, but several financial mechanisms that generate income. For example, you can put funds into individual investment accounts – up to 400 thousand rubles. Even if you don`t do anything with them, this amount is exempt from personal income tax (NDFL), and you are guaranteed to save 13%.
For those who have retirement on the horizon, you can participate in the long-term savings program with co-financing from the state. Over 10 years, you can accumulate a million rubles, with half of this amount contributed by the state to your account. I also advise looking into federal loan bonds (OFZs). They offer about 8% profit. However, you need to be prepared for deposit rates to also move into this range soon.
