How Does the Decline in Deposit Interest Rates Affect Investors?

Declining Interest Rates in the Banking Sector

In Turkey's banking sector, a significant decline in deposit interest rates has been observed recently. The Central Bank of the Republic of Turkey (CBRT) reduced the policy rate by 150 basis points in the monetary policy committee meeting in December, bringing the rate down to 38%. This decision prompted banks to quickly revise their deposit interest rates downward.

Short-Term Deposit Interest Rates at Critical Levels

Especially in short-term deposit accounts, interest rates have fallen below %40 levels. In some banks, this rate has dropped to %37, attracting the attention of investors. High-yielding deposits that were lucrative in the second half of the year have started to lose their appeal due to falling interest rates.

Significant Decreases in Returns

This pullback in deposit yield rates has directly affected the earnings of investors. For instance, the return on 1 million TL for a 32-day term previously reached up to 44 thousand TL, but in just the past few weeks, this amount has rapidly decreased to below 30 thousand TL. In some banks, this figure has fallen to as low as 16 thousand 816 TL.

Impact on Savers

This situation has significantly limited the earnings of savers who primarily use deposits as their investment vehicle. Statistics on interest earnings published by CBRT clearly show the decline in deposit interest rates. For example, in the week of December 12, the deposit interest rates applied by banks were calculated as 42.89% for maturities up to 1 year, 44.68% for maturities up to 6 months, 46.92% for maturities up to 3 months, and 45.54% for maturities up to 1 month.

Impact on Future Investment Preferences

Experts predict that this decline in interest rates will play a decisive role in shaping investors' preferences in the coming period. The decrease in income obtained through deposits may encourage individual investors to turn to alternative investment instruments.