Greeks shift to time deposits
Funds amounting to some 13 billion euros have been moved into term deposit accounts since the start of the year, as their total now stands at €46.5 billion, from €33.4 billion in January, according to Bank of Greece data on the course of deposits in August.
The main movements in time deposits comes from individuals who, since the beginning of the year, have increased their volume by approximately €10.1 billion, reaching €35.3 billion at the end of August, from €25.2 billion at the end of last January, while the balance of term deposits held by companies in banks increased by €3 billion, reaching €11.2 billion at end-August.
Time deposits represent about a quarter of total deposits (25%) in the Greek banking system and, according to estimates, this percentage will reach 30% by the end of the year, as the peak of the rise in interest rates will favor their further moves next months either through new renewals of term deposits that are set to expire in the coming period or through new inflows.
An alternative short-term solution for savers is treasury bills, providing satisfactory returns – 3.90% annualized based on Wednesday’s auction.
