Economist Zubets named the deadline for the most profitable deposits

Nowadays, a bank deposit is the simplest and at the same time profitable means of investing money. But this situation will not last forever. Yes, for now the Bank of Russia, as the market predicted, kept the key rate at 16%. This means that deposit rates will remain high. Meanwhile, inflation is declining and the flow of easy money from passive income is likely to dry up. Alexey Zubets, director of the Institute of Social and Economic Research of the Financial University under the Government of the Russian Federation, spoke about why long-term deposits are not profitable and when banks will begin to reduce the appetites of MK depositors.

-How long will the key rate remain high?

-It will remain high until the end of the year. The Central Bank will reduce it in the second half of the year, but it will still not reach the inflation level. The key rate will be higher than inflation, which will ensure a positive return on deposits.

-Does it follow from this that deposits will continue to be the most attractive tool for saving money?

-Almost yes. 15% per annum on a deposit (and many banks now offer this percentage) with inflation of 7-8% gives about 8% net return. That’s a lot. Deposits have replaced all other investment instruments.

-It turns out that deposits are the most attractive investment option at the moment. But why have individual banks already begun to reduce rates on a number of products, despite the stability of the Central Bank’s key indicator?

-The Central Bank stated that there are forecasts for reducing the key rate. Accordingly, banks do not want to pay more on deposits than the key rate. For this reason, some restrictions have already begun to appear on long-term deposits for six months or more. This is a normal story. All market players understand that the rate will not remain at 16% until the end of 2024. Therefore, it is necessary to reduce the appetites of investors. This is inevitable and banks are quite reasonable in being proactive.

-Let’s talk about profitability and its prospects. According to Financial Services, the average return on deposits for three months in the top 50 banks was 14.34%, for six months – 14.23%, and for a year – 12.74%. What will we see in the near future?

-The key rate will not increase, and, therefore, the offers that exist today are already maximum. Further profitability will only fall.

-In this case, which deposits are the most profitable: up to a year or long-term?

-We need to make a choice in favor of short-term deposits. They are the most profitable. Somewhere there are options of 15%. Annual less profitable. There is nothing to think about here.

-And yet, now does it make sense to open a long-term deposit? Maybe this will allow you to fix a high rate for a long time?

-Bankers are not idiots. They will not allow you to lock in a return of about 16% for the year. They can fix a yield of 12%, taking into account the fact that the key rate at the end of the year, say, will be 13%. If you make such a deposit, you will lose the higher profitability that you could receive in the first half of the year. The most optimal and good tool is to open a short deposit for six months. Further, the profitability of all products will fall. It is better to catch the favorable conditions that exist now. A deposit is a guaranteed return that flows into your hands. All that remains is to open them wider.

-In your opinion, if, say, a bank needs additional funds, will it be ready to improve the conditions for deposits, making its offer more interesting than that of its competitors?

-Yes, there are banks that can give higher returns. But here you need to understand what such generosity is based on. I myself recently received an offer to invest for 5 years at 30% per annum guaranteed. This was the bank where I had been keeping a lot of money for a long time. It is one of the largest and systemically important. Naturally, I had a question about whether this bank is doing well with its financial stability. Why? Because real market yield is equal to the Central Bank key rate. Everything that is proposed beyond this raises questions, not unreasonably.

-And yet such proposals sound tempting.

-It’s tempting, but there are risks. 30% is too much. If a bank has the ability to pay such a profitability, then everything is fine with its financial stability. And then, why should he attract my money? It turns out that the bank goes to the Central Bank, takes money at 16% and gives it to me at 30%? Why, if he can let me open a deposit at 15% and put the difference in my pocket? There is a catch here, connected with the insufficient solvency of this bank.

-Should those who already have a deposit open at a rate just below 15% close it and open a new one on more favorable terms?

-16% you won’t find. If there is such an offer, then the consumer should be wary. The bank takes the money at 16% and gives it to you at the same interest. How does he cover the costs? This story smells like something bad. I would not respond to such a proposal.

-What if a person has a deposit at 7%?

-Here you need to run to the bank and put this money at 15%.

-What should you pay attention to when choosing a bank?

-Firstly, deposits must be insured. Secondly, the bank must be sustainable in the long term. That is, not a sharashkin’s office, but an organization with a history and a transparent financial policy. There is a rating of banks’ reputation based on complaints. We need to see whether people complain about the bank or not. All data can be found on the Internet. But the first sign of dishonest behavior is too high a profitability.