Savings Market in October: Interest Rate Decline and Billions Drying Up on Accounts
As of the end of October, the interest rates offered on savings accounts to individuals by different banks vary by exactly a factor of two, with the best offer at 3% and the lowest at 1.5%. Still in September, the best offer was 3.3%, but with high probability, the continued decline of Euribor will make the yield offered to clients even lower before the end of this year.
A savings account is intended to earn returns on money that may be needed for other expenses in the near term, and for this reason, the depositor can withdraw their money back into use within one to three days without losing the earned interest. Among commercial banks, as of the end of October, Bigbank offers the best interest rate on savings accounts at 3%, followed by Swedbank, LHV, and Coop Bank at 2%, SEB at 1.8%, and Citadele at 1.5%.
According to Jonna Pechter, head of Bigbank Estonia, it is likely that the rapid decline in Euribor will lead to interest rate cuts by several market participants in the coming months. "However, it is clear that three percent is quite a good addition to savings that are essentially risk-free and can be accessed immediately," Pechter comments, and reminds that the Guarantee Fund's protection of up to 100,000 euros also applies to savings accounts.
At the same time, according to Pechter, billions of euros are still sitting on Estonian people's bank accounts, which essentially earn no interest. "Unfortunately, many people lack the habit of ensuring that every euro of theirs that is temporarily unused—for example, money saved for a new refrigerator—earns some additional return," Pechter commented, noting that one significant reason is the intervening so-called cheap money years, when it was simply not possible to make savings generate returns easily and risk-free.
One longer-term trend is that large universal banks pay clearly lower interest on both savings and term deposits. "As long as people simply keep their money in accounts, large banks essentially have free money widely at their disposal and all the earnings generated go to the bank," Pechter explained.
Interest rates on savings accounts offered by Estonian commercial banks in October 2024 (banks are listed in alphabetical order in the table).
| Savings Account | Name | Interest Rate | Terms |
| Bigbank | Savings Account | 3% | withdrawal on day 3 |
| Citadele | 1.50% | no restrictions | |
| Coop Bank | Money Tap | 2% | withdrawal after 1 day free, immediate withdrawal costs €5 |
| LHV | Savings Account | 2% | no restrictions |
| Luminor | Reserve Account | 2% | one free withdrawal per month, thereafter 0.3% of amount, min €1.6 |
| SEB | Savings Account (incl. Digital Drawer) | 1.80% | withdrawal on day 3 free, immediate withdrawal costs 0.5% min €1.6 |
| Swedbank | Money Collector | 2% | no restrictions |
