Interest on the account: Will it be possible to earn income from a deposit in 2025?

In December of last year, the board of the National Bank of Ukraine decided to raise the key interest rate to 13.5% per annum. This decision was aimed at maintaining the stability of the currency market, controlling inflation expectations, and gradually slowing inflation down to a target of 5%, as reported by the NBU.

According to the NBU, the Ukrainian Index of Retail Deposit Rates (UIRD) changed from January 5, 2024, to January 6, 2025, as follows:

• for deposits in hryvnias ranked 3rd — a decrease of 0.71 percentage points to 13.06% per annum;
• for 6-month deposits — a decrease of 1.32 percentage points to 12.93% per annum;
• for annual deposits — a decrease of 1.17 percentage points to 12.98% per annum.

In 2025, experts expect the deposit rates to depend on the NBU's key rate and the rates for 3-month deposit certificates. "Currently, after the December adjustment of these two indicators, there will not be significant changes in the 'base' yield, unless citizens decide to take advantage of numerous bonus programs and promotions that allow for deposits with additional yield (averaging 1-1.5 percentage points). There are already predictions that in January the regulator may adjust the key rate (corresponding changes may also occur in the rate for 3-month deposit certificates). The level of adjustment will directly influence banks' plans for deposit development and what yield they offer," says Dmitry Zamotaev. In his opinion, in the first quarter of 2025, the average rates for hryvnia deposits will be:

• ultra-short deposits with terms from 3 months to 6 months — 9.5% per annum;
• deposits for terms from 9 months to 1 year — 11% per annum;
• deposits from 1 year to 2.5 years — 13% per annum.

In 2025, experts expect the deposit rates to depend on the NBU's key rate and the rates for 3-month deposit certificates.

According to the expert, in the first quarter of 2025, the main reason customers will choose ultra-short deposits is to minimize losses from inflation and to gain quick access to their funds amid the uncertainties of winter economic and military conditions. After all, a short deposit term alleviates concerns about early termination of the agreement if there is a sudden need for accessible funds.

As for the rates, since a decrease in inflation is anticipated, the National Bank is likely to lower the key rate. This will affect banks, which will reduce interest rates on term deposits for citizens.

"We understand that in the current environment, inflation is not static. At least in the second half of 2025, a decrease to 7% is expected, which will automatically affect the 'weight' of the interest earned on deposits. According to our calculations, if a citizen opens a deposit for 1 year or more at the beginning of 2025, they can expect to receive 3-4% net profit, as the maximum rates on long-term deposits, considering promotional offers, can reach 16% per annum," says Dmitry Zamotaev.

The income from deposits will be lower both due to the low rates and as a result of increased taxation on deposit income.

In his opinion, banks will attract new clients not only through more favorable rates but also by offering additional benefits, such as loyal early termination conditions, increased interest on card balances, or additional bonus interest for placing large sums, among others. "Incentives" serve as the best motivation during times of uncertainty both in the economy and on the front lines. However, the most critical factor influencing citizens' decisions on placing funds will be the desire to protect their savings from inflation," concluded Dmitry Zamotaev.

Let us remind you that the increase in the military tax from 1.5% to 5% will lead to an increase in the overall tax burden on deposit income for Ukrainians in banks to 23%.