CEC Bank rises interest rates for deposits following the market trend

Paul Barbu 05/08/2019 | 11:37

CEC Bank, a Romanian state-owned bank, has increased interest rates for RON fixed-term deposits for both retail clients and companies.

The interest rate for deposits for individuals reaches 4.50 percent per year in the case of term deposits with a fixed interest rate of 36 months, and for companie the interest rate reaches 2.00 percent, in the case of 12-month deposits.

Deposits can be set up through the over 1,000 territorial units of CEC Bank, of which about 500 are in rural areas, as well as through digital solutions of the bank – CEC Bank Mobile Banking, Internet Banking CEConline or Phone Banking TeleCEC.

Moreover, as of July 25, 2019, the standard CEC Bank current accounts for retail clients benefit has a 0.10 percent interest rate per year.

Deposits in Romania up to EUR 100,000 are guaranteed, according to the current legislation. CEC Bank ended 2018 with a gross profit of RON 432.97 million, the best financial performance of the last 11 years.

The Bank recorded an increase of 11 percent in electronic and digital operations last year. The bank’s customers benefit from a national network of 1,214 ATMs and 6,704 POSs, as well as complete Internet Banking, Mobile Banking and Phone Banking services.

Since 2017, the interest rates for bank deposits in Romania turned negative as a consequence of inflationary government’s policies and dovish monetary policy of the central bank, which preferred to keep interest rates low despite soaring inflation.

At this moment, the key-rate of the Romanian central bank is 2.5 percent, but the annual inflation rate was above 4 percent for much of last year.

The monetary policy rate is a reference for the interests offered by banks to deposits, and the last official data show that clients don’t get much from banks for keeping their savings.

In May 2019, the average interest rate for a bank deposit –for both households and businesses – was 2.4 percent (for 6-12-month maturity), while the central bank estimates that the inflation rate of 4.2 percent in December 2019 and 3 percent in June 2020.

Some local banks have increased interest rates for deposits during this year but most clients are losing money in real terms.

 

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