Savings Continue to Accumulate in Non-Interest-Bearing Accounts

Citizen savings continue to grow, but the majority of this money is held in sight accounts (overnight deposits) that yield only a symbolic interest rate. Data from the Croatian National Bank (HNB), as commented on by analysts from Raiffeisen Bank, indicated that overnight deposits accounted for almost 73 percent of the total in June, amounting to nearly €45 billion. Over the course of a year, their amount increased by 12.4 percent. It is worth mentioning that just a month earlier, at the end of May, overnight deposits held a share of 71.8 percent.

On the other hand, term deposits amount to €16.8 billion, which is just over 27 percent of total deposits. RBA analysts emphasize that this type of deposit recorded a negative change of 0.9 percent year-on-year in June for the first time since February 2023. This was contributed to by a monthly decline of 2.5 percent. According to their interpretation, this reduction is likely a consequence of the decrease in market interest rates in the context of the gradual easing of the restrictive monetary policy implemented by the European Central Bank.

The decline in term savings was primarily driven by the withdrawal of citizen savings. Household term deposits amounted to €10.4 billion in June, which is 5.3 percent lower compared to June of last year. Corporate deposits of €4.3 billion decreased by 3.4 percent. It is worth recalling that the ECB’s key interest rate has stabilized at two percent. According to HNB’s comparative data on interest rates for deposits with a single payment and a maturity of 12 months, domestic banks offer between 0.4 and 2.3 percent for term deposits.

Although the interest on term deposits is currently quite ‘meager’, making it economically logical to reduce this type of deposit, few can find any logic in the increase of sight savings. Namely, for this type of deposit, banks offer an interest rate of 0.01 percent to a maximum of 0.05 percent. Despite this, money in such accounts continues to accumulate. Statistics indicate that total household deposits amounted to €40.7 billion or 65.9 percent of total deposits. Of this, €30.3 billion was in overnight deposits, representing a 14 percent annual increase. The growth of total deposits accelerated from 8.1 percent in May to 8.3 percent in June, while compared to the previous month, they increased by 1.2 percent.

– After a noticeable slowdown in the annual growth of household deposits at the end of 2023 due to the base period effect (due to the increase in funds in transaction accounts in the same period a year earlier following the introduction of the euro), the annual growth rate has gradually normalized since the beginning of 2024 (the disappearance of unusual changes from the calculations), and from the beginning of 2025, it has recorded a gradual acceleration that was briefly halted in April – commented RBA.

On the other hand, total corporate deposits amounted to nearly €16.7 billion or 27 percent of total deposits. On an annual basis, their growth rate accelerated from 3.7 percent in May to 5.4 percent in June, with a monthly increase of 2.8%. In terms of structure, €12.4 billion of corporate deposits were in overnight deposits, which is equivalent to an increase of 8.9 percent year-on-year with a six percent increase on a monthly basis.