Banks are raising deposit rates: how much can you really earn on 100 thousand hryvnias

Ukrainian banks are offering higher rates on hryvnia deposits after the National Bank decided to raise the discount rate to 16% per annum. Some offers on the market already reach 17.5%, but the actual income of the depositor will be significantly lower due to taxation.

On September 17, the National Bank raised the discount rate by 0.5 percentage points to 16%. The regulator explained the decision by increasing inflationary pressure and inflationary risks. At the same time, the higher rate should support the attractiveness of hryvnia savings and domestic government bonds.

Where to offer the highest interest rates

As of September 22, the maximum rate on a hryvnia deposit for a period of one year was 17.5% per annum. Such conditions were offered by Yunex Bank for the “Maximum” deposit. The minimum deposit amount is 5 thousand hryvnias, the term is 366–367 days.

Among other offers with high rates:

O.Bank — up to 17.37% per annum;
Idea Bank — up to 17.37%;
Accordbank — up to 17%;
Europrombank — up to 16.8%;
Altbank — up to 16.75%;
Asvio Bank — up to 16.6%;
Ukrainian Capital — up to 16.5%;
Taskombank — up to 16.5%.

At the same time, the maximum yield may depend on the term of placement of money and other conditions of a specific deposit product.

How much will a deposit of 100 thousand hryvnias actually bring

A rate of 17.5% does not mean that the depositor will receive all the income accrued by the bank. Interest on deposits of individuals is taxed: 18% personal income tax and 5% military levy.

If you deposit 100 thousand hryvnias per year at 17.5%, the bank will charge 17,500 hryvnias in interest. After taxes, the net income will be approximately 13,475 hryvnias. The total amount after the end of the deposit term is about 113,475 hryvnias.

For a deposit of 50 thousand hryvnias, the net income under similar conditions will be approximately 6,738 hryvnias, and for a deposit of 10 thousand hryvnias – about 1,348 hryvnias.

Can deposit rates increase further

The increase in the NBU discount rate does not mean an automatic and uniform revision of deposit programs by all banks. Financial institutions independently determine the conditions for attracting customer funds.

Therefore, when choosing a deposit, you should pay attention not only to the declared interest rate. The deposit term, minimum amount, the possibility of replenishing the account, early termination of the contract and the terms of interest payment remain important.

Thus, the maximum rate on the market may look attractive, but 17.5% per annum is not 17.5% of net earnings. For a deposit of 100 thousand hryvnias, the difference between the interest accrued by the bank and the amount that the depositor will actually receive after taxes exceeds 4 thousand hryvnias.