In an environment of rising interest rates and fierce competition, LHV Pank decided to raise the interest paid on fixed-term deposits to the highest level on the market. LHV is now offering 4% interest on annual deposits, and has also increased the interest rates on shorter-term deposits.
According to the new interest rates, LHV now offers an annual interest rate of 1.75% for 1-month fixed-term deposits, 2.50% for 3-month fixed-term deposits, 3.00% for 6-month fixed-term deposits, and 3.50% for 9-month fixed-term deposits.
According to Kadri Haldre, Head of the Treasury at LHV, the bank decided to raise the interest rate on deposits to 4% in order to encourage clients to put their idle money into fixed-term deposits. ‘A better deposit interest rate encourages saving and thus improves the health of the economy – as a result of increased interest rates, for example, the volume of fixed-term deposits at LHV has tripled in a year, and we can use the same money to provide loans to Estonian people and businesses. We wish to support depositing even more, which is why we have also raised the interest rate on fixed-term deposits above the Euribor,’ said Haldre. In April, LHV concluded nearly 4,400 fixed-term deposit contracts.
According to Haldre, the most common choice among private individuals is the 12-month deposit – this is considered the optimal period for investing idle money. ‘In April, 62.5% of fixed-term deposits had a term of one year. It is up to each client to decide which deposit period suits their means and plans the best. While private individuals tend to opt for an annual deposit, businesses are likely to have a shorter deposit period. Looking ahead, it is difficult to give a long-term prediction of the European Central Bank’s monetary policy decisions and hence the course of interest rates, but it seems that most of the upward movement has already happened,’ she said.
In addition to the interest rates on fixed-term deposits, LHV Pank also increased the interest rate on demand deposits for business clients, according to which companies are paid a significantly higher interest of 1.00% for an amount exceeding EUR 20,000 in their current account.
The current interest rates are historically high. Interest rates on fixed-term deposits in Estonia were previously at this level in early 2009, when Estonian kroons were still in circulation – right now is the first time that the interest rates have been at such a level since the changeover to the euro.
Concluding a fixed-term deposit contract in the LHV Internet Bank is easy – just select ‘Open a deposit’ and set a term for the deposit. A fixed-term deposit is a safe way to build up savings, as the client’s deposits with the bank are fully guaranteed up to € 100,000, backed by a guarantee fund. See more: https://www.lhv.ee/en/fixed-term-deposit.
LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank, LHV Varahaldus, and LHV Kindlustus. The Group’s companies employ more than 930 people. As at the end of April, LHV’s banking services are being used by 394,000 clients, the pension funds managed by LHV have 131,000 active clients, and LHV Kindlustus protects a total of 158,000 clients. The Group’s subsidiary LHV Bank owns a banking licence in the United Kingdom and offers banking services to international fintech companies and loans to small and medium-sized enterprises.All news