Interest rate on deposits still very low
For a term deposit of 50,000 euros, the interest rate given by European banks, in countries from Italy to Lithuania and from Germany to Sweden, is between 3.50% and 4.55%, while in Greece the corresponding interest rate is just between 1% and 1.5%.
From the data collected by Kathimerini, it appears that Greece lies fourth from bottom in terms of returns on term deposits of up to one year from households, with an average interest rate of 1.73%, while the corresponding average interest rate in the eurozone amounted to 3% in September.
For small amounts, under €10,000, term deposits make absolutely no financial sense, since their interest rate rarely exceeds 1% at Greek lenders.
Greek banks maintain the spread between lending and deposit rates at high levels, thereby enhancing profitability from the main source of income, which is interest income.
A notable difference from other countries is that local banks also follow the practice of increasing yields quarterly, starting from very low levels such as 0.30% (annualized) for the first quarter with a gradual increase per quarter depending on duration and amount.
