Deposits: Banks abolish interest on Savings – The exceptions

The administrations of the four major Greek banks are ready to press the button for the abolition of interest on all deposit demand products, savings and current accounts. The increase of the negative European interest rates today, even within 2022, may be a possible scenario due to the inflationary pressures, however, until we see positive returns in the traditional banking programs in Greece, it will probably take some time.

Undoubtedly, the minimization of interest expenses by the systemic groups is a key aspect of the plans to enhance their organic profitability. Over the last three years, interest rate policy adjustments on deposits have been continuous and have led the annualized yields already in areas slightly above 0%.

According to the latest official data of the Bank of Greece, the weighted average interest rate on Savings Accounts had fallen in November 2021 to 0.02% from 0.06% in 2018, while overnight deposits for businesses were formed for the first time in modern economic history of the country at 0%.

The goals for this year

From now on, the goal is not to pay a single euro to depositors for money "parked" in classic bank accounts. The movements of credit institutions have started since last year. Eurobank last fall abolished the scales in saving accounts and no longer gives interest to its customers, regardless of their balance.

The National Bank, on the other hand, eliminated interest rates for amounts up to 60,000 euros on its respective products, as did Alpha Bank with a limit of 30,000 euros, while at Piraeus Bank the yield is 0.01% for amounts up to 200,000 euros.

This year, however, even these minimum interest rates are being abolished. As Alpha Bank announced last week, from next March it will not pay...