50% era ends: Significant drop in TL deposit rates – Türkiye Today

In a significant development affecting everyone with savings in the bank, Turkish lira deposit interest rates, which were between 58% and 60% two months ago, have now dropped below 50%. This 10-point decrease translates to a monthly reduction of ₺8,000 in returns for a ₺1 million deposit. Bankers are advising savers to opt for long-term deposits if they do not plan to use their money soon.

Economic policy and inflation control

The Turkish government continues its high-interest rate policy to curb excessive consumer spending tied to loans and encourage savings in Turkish lira. This policy, aimed at fighting inflation, is beginning to show results. However, recent weeks have seen notable changes in deposit interest rates.

50% era ends

In April, deposit interest rates for TL, excluding KKM, were easily accessible at 58%-60% across many banks and for any amount of money. KKM was a scheme launched by the government in late 2021 to help reverse dollarization and support the Turkish lira.

Recently, these rates have dropped by nearly 10 points. Today, deposit rates above 50% are offered only by a few banks and typically for large amounts or under promotional “welcome interest” schemes.

Returns drop by ₺8,000

After rising above 50% for the first time in years, these interest rates are now expected to peak at this level. Current rates mostly range between 45% to 50%. Over the past two months, this 10-point decrease has reduced the monthly returns on a ₺1 million deposit from ₺48,000 to ₺40,000.

Advice for savers

Bankers note that with the onset of a downtrend in inflation, expectations for interest rate cuts are rising. They foresee that the decline in deposit interest rates may continue. For those who do not plan to use their savings in the near future, it is recommended to opt for longer-term deposits.