Attention those with money in the bank! Interest rates have reversed: Here are the new rates...

Milliyet.com.tr/ÖZEL The Central Bank's 300 basis point interest rate cut in July shifted the balance of loan and deposit rates at banks. While interest rates on housing, consumer, consumer, and vehicle loans began to decline significantly, deposit rates also fell below the critical threshold of 50%.

THE INTEREST RATE HAS TURNED DOWN COMPLETELY!

Deposit interest rates, which reached a year-high of 53% before the Central Bank of the Republic of Turkey (CBRT)'s interest rate decision, subsequently declined to 50%. Currently, a few banks are offering interest rates of up to 49% under special "welcome" campaigns for new customers. However, existing customers receive interest returns even lower than this.

However, "Welcome" campaigns are mostly offered to investors with shorter terms. Banks are limiting the 49% interest rate to three-month terms. Interest rates drop significantly for those who want to open a deposit account with a term longer than three months.

Banks Revised New Rates

Average deposit interest rates have currently fallen to 46% at many banks. Some are even reaching 40%. So, will interest rates drop even further? According to current rates, how much does someone with 1 million TL earn monthly? What are the interest rate expectations for the end of the year? Hikmet Baydar, Founder of 3rd Eye Consultancy, commented on all the questions on the subject to milliyet.com.tr: “We anticipate a gradual decrease in interest rates until the beginning of the year. We estimate this decrease will be around 200-250-300 basis points.”

WATCH OUT FOR NEXT MONTH: '2-3 POINTS MAY DECLINE'

In this case, we believe banks will gradually begin lowering deposit interest rates in line with the Central Bank. Given that the Central Bank of the Republic of Turkey (CBRT) is projected to reduce interest rates to 40% at its first meeting in September, according to the Market Participants Survey, we could see deposit interest rates decline by around 2-3 percentage points next month.

Since the Central Bank of the Republic of Turkey (CBRT) rate cuts will at least lead to a decrease in the market's funding rates, which are already in the red, banks will be more willing to allow deposit outflows as they access alternative, cheaper sources. Therefore, the extent of the impact depends on how liquid the CBRT maintains in the market. We estimate a decline in deposit rates of at least 2 percentage points.

IS INVESTING IN DEPOSIT STILL ATTRACTIVE?

The most important issue for investors is real returns. Currently, there's a significant difference of nearly 950 basis points between inflation and nominal interest rates. Therefore, a high return opportunity is offered. As long as interest rates remain above inflation, they will remain attractive because they offer protection against inflation.

WHAT DOES A PERSON WITH 1 MILLION TL EARN?

While those who tie up 1 million TL in 32-day deposits will earn a gross of 40,985 TL, they will receive a net of approximately 33,813 TL after paying taxes of around 7,172 TL.

WHAT WILL BE THE YEAR-END DEPOSIT INTERESTS?

According to the Market Participants Survey, the year-end CBRT policy rate expectation is around 36%. Therefore, if we add the real yield, we could see a year-end deposit interest rate level of around 42%.