The Central Bank of Russia recently lowered its key rate but has hinted at a potential future increase if inflation accelerates. This decision arrives as banks are already decreasing deposit interest rates, impacting savers who may have been drawn in by previously high rates.

Banks started reducing interest rates on deposits even before the Central Bank’s key rate adjustment. Data from “Finuslugi” reveals that the average rate on six-month deposits in Russia’s largest banks has reached its lowest point since October 2024, currently averaging 19.3% for six-month deposits and 18.6% annually. Banks are apparently anticipating depositors will seek to lock in current rates by opting for longer-term deposit products.

Financial advisor Alexey Rodin suggests opening long-term deposits to secure current high rates, predicting a steady decline in deposit yields. Rodin also proposes long-term government bonds with a fixed coupon as another option.

Ilya Vasilkov from “Sravni” explains that banks have started to decrease deposit yields in anticipation of the Central Bank’s decision on the key rate, aiming to balance their margins. Vasilkov anticipates a further decrease in rates over the coming months to stimulate economic growth, estimating the key rate will reach 18-19% by the end of the year, with average deposit rates falling to 16-17%.

Anna Baranova from the Association of Electronic Trading Companies (APET) predicts a minimal outflow of deposits despite the rate decrease, citing a lack of accessible alternatives for the population. She highlights that deposits, even with reduced profitability, remain the most understandable and accessible savings instrument for most citizens. Baranova also pointed out that the foreign exchange market’s instability and the risks associated with foreign currency investments make deposits the best option for most Russians.

Baranova dismisses rumors of deposit freezes or withdrawals of unclaimed funds, emphasizing that deposits up to 1.4 million rubles are insured by the state, providing security. In an unstable economic climate, people generally prioritize capital protection over maximizing profitability and retain trust in the banking system.