There is significantly more interest on Austrian savings – so the main interest rate increases are not only reflected in higher interest rates on loans. On average, an interest rate of 2.85 percent applied to newly taken out deposits in July 2023 – 244 basis points more than the year before.
Short commitment periods are sufficient to receive significantly higher interest rates, according to ECB interest rate statistics published by the Austrian National Bank (OeNB).
The ECB’s interest rate increases had a similar effect on lending interest rates as on newly issued loans. In contrast, interest rates on overnight deposits rose to a much lesser extent. The average interest rate here in July was 0.69 percent, equivalent to an increase of 63 basis points. However, with a longer term, interest rates do not increase: an interest rate of 2.72 percent applied to savings deposits with a term of three to six months. Anyone who commits the money for two years gets 2.96 percent.
But Austrian banks are also lagging behind the ECB’s interest rate increases when it comes to interest rates on loans. For all credit purposes, the average interest rate in July was 5.03 percent, an increase of 283 basis points. In the same period, the ECB increased the main refinancing rate by 350 basis points to four percent. It has now been decided to further increase to 4.5 percent.
Even though daily deposits were twice as high as tied savings at around 199 billion euros, the higher interest rates are already having an impact. Overnight deposits fell by seven percent within a year, while savings increased by 18.6 percent.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
