Cyprus savers still earn among eurozone's lowest deposit rates, central bank finds
Deposit returns edged up in September, but the Central Bank of Cyprus says savers here remain near the bottom of the eurozone table, while loan costs sit close to average.
Cyprus households are still offered some of the weakest returns on their savings anywhere in the eurozone, according to the Central Bank of Cyprus, as reported by Cyprus Mail. Its latest monetary and financial statistics show lenders lifting deposit rates modestly in September while loan pricing stays close to the European average.
The average rate on new household deposits with a term of up to one year rose to 1.62 per cent from 1.35 per cent a month earlier, and the equivalent rate for non-financial companies reached 1.70 per cent. Even so, the CBC says both new and outstanding deposit rates here remain at the low end of the single currency area.
On the lending side, new mortgages averaged 3.88 per cent, down from 4.16 per cent, and consumer credit fell to 6.45 per cent. Business borrowing moved the other way, with loans of up to €1 million at 4.76 per cent and larger loans at 4.40 per cent, while total new lending jumped to €896.8 million from €390.1 million.
What it means for residents
The gap between what banks charge and what they pay out is not going away soon: the CBC links weak deposit returns to the large cash buffers held by Cypriot lenders, whose liquidity coverage ratio stood at 305 per cent against an EU median of 182 per cent. For anyone with savings sitting in a current or notice account, loyalty is expensive.
- Check your rate. Ask what your bank currently pays on a one-year fixed deposit and compare it with the 1.62 per cent average before renewing anything automatically.
- Mind the mortgage type. Variable-rate home loans have shrunk from almost all new lending in early 2022 to 9.8 per cent in September, so read whether a fixed deal converts to floating later.
- Business borrowers. If you are repaying a loan above €1 million, refinancing talks may be worth opening now that the average has climbed to 4.40 per cent.
This text is written from the source article and is not a translation of it.
