Banks, Deposits, Estonia, EU – Baltic States, Financial Services

The situation is somewhat ironic because of the remark posted at the homepage: "By opening a deposit in the online bank, the euro deposit interest rate is higher."

"The European Central Bank's measures for reviving the European economy after the economic crisis have led to a situation where the price of money, i.e. the base interest rates are virtually zero. Extremely low base interest rates also mean that the banks deposit interest rates are super low," explained SEB Board Member Eerika Vaikmäe-Kõik.

Koit added that despite the lack of return on fixed-term deposits, term deposits are valued by customers as the money is out of everyday use for the client.

Swedbank's deposit interest rates are not zero but are tiny: for up to 11-month deposits, the bank pays interest of only 0.01%.

In Danske Bank, the deposit interest rate is 0.1% for up to 8-month deposits; Nordea has not yet lowered interest rates sharply. Nordea bank has a 0.45% interest rate for 1-year long deposits.

The deposit interest rates in small banks are at a relatively higher level, up to a maximum of 1%. LHV offers in a campaign to attract new customers until the end of April up to 2% interest rate. Old customers have to be content with 1% interest.

As the European Central Bank made deposit interest rates negative last summer, the talk started about the possibly negative interest rate of deposits to customers. According to specialists, negative interest rates do not threaten an ordinary depositor but it is possible for large institutional depositors.

The deposit rates in Estonia were already among the smallest in the euro area. European Central Bank statistics indicate that up to 1-year long deposits of private citizens had an average interest rate to 0.37% in February. The rates are equal or lower only in Latvia, Lithuania and Luxembourg.