Lenders begin to raise rates

Government pressure on the local credit system for the reduction of charges for customers and the increase in deposit interest rates is paying off, with the first couple of banks already heeding the Finance Ministry’s call.

Piraeus Bank and Pancreta Bank on Friday announced increases to their interest rates on time deposits following the new rise in European interest rates by the European Central Bank, as well as reductions in bank charges, while the other banks are expected to make similar moves from next week.

Piraeus announced that as of Monday it will be adjusting the interest rate on its basic deposit product, “Sta Metra Sou” term deposit, offering an interest rate of up to 1% for a period of 12 months. The 1% interest rate applies to amounts over 250,000 euros, while for smaller amounts the interest rate is 0.50%. As announced by the bank, it is a form of term deposit that gives depositors the opportunity to choose the features themselves, such as the amount, duration, interest frequency etc, and thus adjust it according to their needs. 

In addition, given the inflationary pressures on disposable incomes, the bank announced it is reducing or even eliminating costs for a number of basic banking services and payment transactions in order to help its customers lower their costs when managing transactions and obligations.

From January 3, Pancreta Bank will also reduce the commissions related to cash transactions and electronic payments. The reduction applies to fees for remittances, bill payments and debit cards with the aim of encouraging consumers to continue replacing cash with electronic payments.

Pancreta Bank has proceeded with an increase in interest rates on deposits, which concerns the interest rates of both time deposits and savings deposits. For example, one-year term deposits have their interest rate set at 1% for amounts between 50,000 and 100,000 euros, while savings accounts have an interest rate of up to 0.40%.