Russians were told how to make money on high deposit rates in December

More than a third of citizens are ready to take money to banks to save it from inflation

Five rounds of raising the key rate of the Central Bank of the Russian Federation influenced the desire of the regulator’s wards – domestic banks – to sharply increase the profitability of savings. In December, banks offer Russians to open deposits at 16-18.5% – these are the most favorable conditions for the year. According to a survey by one of the sociological platforms, more than 36% of Russians plan to take advantage of this opportunity in the near future. MK found out from experts about for what period it is best to open deposits, in which banks and whether it is worth waiting for a further increase in deposit rates.

Vladimir Chernov, analyst at Freedom Finance Global:

“In mid-December 2023, the Central Bank of the Russian Federation increased the key refinancing rate to 16% per annum. Probably, this will end the cycle of tightening the monetary policy of the Bank of Russia (that is, the period when the rate was constantly raised – “MK”), and the key rate will not rise higher in the coming years. Accordingly, at the moment, the yield on bank deposits is at its highest levels in a long time. If no emergency rate increase follows, then it is most profitable to open a bank deposit in December.

However, a small probability of another increase in the key rate in February 2024 still remains if inflationary pressure on the Russian economy begins to increase again at the beginning of next year. In this case, the regulator can increase the key rate to 17% per annum, and the yield on all bank deposits will also increase by about 1% per year.

But given the strengthening of the Russian ruble by about 10% since September and the tight monetary policy of the Central Bank of the Russian Federation in the fourth quarter of 2023, inflationary pressure on the Russian economy should continue to decline, so opening a bank deposit at current interest now seems more preferable. That is, this must be done right now, in December 2023. The highest returns at 15–16% per annum now come from short-term bank deposits for 1–6 months.”

Valery Emelyanov, stock market expert at BCS World of Investments:

“December is usually one of the best and most convenient months for opening deposits. Firstly, banks offer holiday promotions with higher rates and more interesting conditions. Secondly, at the end of the year bonuses often come, which, if not saved, are highly likely to be spent. Thirdly, this year rates are at the highest level in 9 years. It would be a sin not to take advantage of this.

The highest rate in annual terms is now given for a period of up to six months. It is more profitable to fix the maximum profitability in those banks that give the maximum for short periods and at the same time fix high rates (open additional deposits with a replenishment option) for a year or more. As for banks, many of them now have good conditions, so it’s better to choose those that are conveniently located or whose remote services you like best.”

Daria Diney, head of the Department of Finance and Credit, Faculty of Economics, RUDN University:

“Saving money in December against the backdrop of the traditional New Year’s surge in inflation can actually lead to negative real returns, since price reductions are often delayed even if there are fundamental prerequisites for this. In addition, against the background of the updating of Western sanctions policy, including the ban on the import of precious stones of Russian origin, the policy of the Central Bank of the Russian Federation may change dramatically in order to support the export industry. In other words, the growth of uncertainty associated with fluctuations in exchange rates and the country’s foreign trade policy may be a harbinger of the next “black swan” – negative developments in the economy.

On the other hand, savings in the national currency, despite the existing risks, can provide a safety cushion and not succumb to the rush of pre-New Year demand for “simulacra” intended to imitate the New Year’s mood. And since any failure of the economy entails a monetary solution to problems (that is, additional emission, the so-called turning on of the “printing press”, which will lead to a depreciation of the ruble against the dollar and a new round of inflation – “MK”), the search for short-term benefits from saving funds can be justified despite the risks.”