Money on the Move: Why Depositors Started Withdrawing Funds from Banks
What`s Behind the Outflow?
June 2025 marked the first time that a significant outflow of fixed-term deposits was recorded by major Russian banks. Even though deposit interest rates currently exceed inflation, citizens are actively withdrawing their funds. Reasons cited include increased summer spending, loan repayments, and growing distrust fueled by alarming rumors circulating on social media. While it`s premature to speak of a mass exodus, this trend is becoming noticeable to both banks and the financial regulator.
In June, several leading Russian banks reported an outflow of fixed-term deposits. While not critical for the entire financial system, which continues to attract deposits overall, this trend is concerning as funds are moving away from key players. The question arises: what is prompting citizens to withdraw their money, despite deposit rates still outperforming inflation?
Seasonal Spending and Rate Cuts
According to Igor Nikolaev, a leading researcher at the Institute of Economics of the Russian Academy of Sciences, seasonality plays a key role. «It`s the summer vacation period, associated with increased spending. People need readily available funds, and the attractiveness of interest rates becomes less important,» he explains. Furthermore, the ongoing reduction in the key interest rate reinforces depositors` belief that deposits will no longer be as profitable as in 2024, when rates reached 23%.
Other financial experts point to the influence of business behavior. Amidst a strong ruble, exporters are compelled to sell foreign currency earnings, but not all of these funds flow into banks. A portion is directed towards early debt repayment or covering current expenses. Similarly, individuals are also adjusting their financial behavior, particularly during a period of sustained consumer uncertainty.
The Impact of Rumors and Distrust
An additional factor is the emotional component. Throughout spring and winter 2024/2025, rumors resurfaced regarding a potential freeze on deposits. This was triggered by discussions of such hypothetical measures as an alternative to tightening monetary policy. Although the Central Bank and official representatives unequivocally denied these ideas, labeling them absurd, a certain level of public unease persisted.
«I don`t believe this was the primary trigger for a mass outflow,» comments Igor Nikolaev. «However, our citizens tend to be cautious, and they have historical reasons, having experienced deposit freezes in the 1990s and crises in 2008 and 2014. Some might have been influenced by information leaks, but it`s more of a background anxiety rather than a decisive factor.» Nevertheless, a decline in confidence in long-term banking products is a noticeable trend. Even with deposit yields still 2–3% above inflation, depositors are actively seeking alternatives or opting not to lock up their funds for extended periods.
Outlook for Autumn
The next meeting of the Bank of Russia on the key interest rate is scheduled for September 2025. Should the regulator decide on a further reduction, this would lead to lower deposit rates, potentially intensifying the outflow of funds. This is particularly relevant towards the end of the summer season, when many people`s vacation savings are depleted, and they need liquid funds.
«If inflation increases by September and the key rate continues to fall, this could be a turning point,» notes Nikolaev. «In that scenario, deposit yields would approach the inflation rate. Many depositors would then genuinely begin to reconsider their financial strategies.»
Currently, it is premature to speak of a mass exodus of depositors. The total volume of deposits within the banking system remains substantial, and interest rates still outpace inflation. Nevertheless, the situation is becoming more delicate: any significant shift in the key rate, geopolitical risks, or increased public distrust could trigger a chain reaction.
In 2024, the amount of funds held by Russians in banks reached a record 70 trillion rubles. Now, as monetary policy shifts direction and deposit yields decline, the banking system is undergoing a stress test. It is possible that autumn will bring its first significant challenge.
For now, the banking system is successfully adapting to changes in client behavior. However, the longer deposit yields continue to decline, the higher the risk that depositors will opt for alternative investments or simply prefer to hold cash.
