Interest rates for time deposits posted a fresh decline in March, to average at 0.88 percent, bank data show.
The drop in time deposit rates has been systematic in recent months and is attributed to credit institutions’ general policy shift toward reducing their cost of drawing money, as well as the declining course of interest rates on a European level.
The benchmark Euribor rate is currently in negative territory, at -0.25 percent, while the average interest rate for time deposits in the eurozone amounts to 0.64 percent.
The fall in time deposit rates comes hand in hand with the decline in the sum of money households have in time deposits: In March there was an 182.3-million-euro drop to 41.2 billion euros, while since July 2015, just after the government introduced capital controls, the decline has come to 6.6 billion euros.
The annual decline from a year earlier (March 2015) is 25.9 billion euros.
Part of those deposits is being used by households to cover expenses or to pay taxes, as a significant share of depositors did not renew deposits that expired, while many bank clients have drawn money directly from their time deposit accounts to pay their obligations to the state.