Published
03/12/2025, 11:44Keeping money in a bank is not only safe but also profitable. Many Kyrgyz citizens follow this strategy, as evidenced by the growth of the deposit base: by the end of January, its total volume reached 611.3 billion KGS, with 204.9 billion KGS belonging to individuals. The popularity of deposits is explained by their reliability: they protect against inflation and guarantee the return of funds. Bank deposits are insured, which means that in case of financial difficulties faced by a credit institution, the state guarantees the return of up to 1 million KGS to the depositor.
However, it is essential to choose the right moment to open a deposit to not only preserve savings but also maximize earnings.
An analysis of information on interest rate increases for deposits shows that banks do not follow a strict schedule. For example, in 2024, some banks raised rates in February and October, in 2023 — in April, October and November, while in 2022, 2021 and 2020 — in May.
However, certain patterns can still be observed. Interest rate increases most often begin in the spring — around March and April. In 2016, 2022 and 2024, there was a noticeable rise in rates during this period. The peak profitability usually occurs in summer — between June and August. In these same years, the highest rates were recorded during these months. On the other hand, rate reductions traditionally begin in the fall — starting from September or October, with December and January often seeing the lowest returns.
According to data from the National Bank, average interest rates on deposits increased in May and June of 2015, from February to July in 2016, while in 2017, there was an unstable growth followed by a decline.
If we look at trends over the past three years, deposit interest rates most often increased during the periods from March to September, from July to December, and from March to July. Moreover, from 2022 to 2024, growth was consistently recorded in July.
Since 2016, July has consistently been among the months of interest rate growth, except for 2017. In 2018 and 2020, rates in July exceeded those in June, even though the overall market was in decline.
However, the highest average interest rates did not always occur in July. For example, in 2015, the highest average rate on term deposits was recorded in June at 9.74%. In 2016, the peak occurred in July at 10%. In 2024, the highest average rate was also in July, reaching 10.49%, while in 2023, it peaked in December at 9.72%.
Conversely, the lowest rates were often observed in December and January. For example, in December 2020, they fell to 8.14%, while in December 2021, they dropped to 8.83%.
The weighted average interest rate on term deposits is based on the average income in the deposit market in both national and foreign currencies, categorized by the duration of the deposit: up to 1 month, up to 3 months, up to 6 months, up to 12 months, up to 3 years and over 3 years.
For deposits in the national currency, banks offer the highest rates for terms ranging from 1 to 3 years. In January 2025, the yield was 13.99%, while in June-July 2024, it reached 14.36% — the highest level since 2017.
For foreign currency deposits, on the contrary, banks offer the most favorable rates for deposits with terms of 3 years and more. Currently, these rates stand at 5.45%, marking the highest level since 2022.
Thus, the analysis of trends indicates that the most advantageous period for opening a time deposit is during the summer, especially in June and July. During this time, rates typically reach their peak values. Conversely, in December and January, the returns are traditionally at their lowest, making it less advantageous to open a deposit during this period.
However, it is important to keep in mind that trends are merely a guideline, not a guarantee of high returns. Interest rates on deposits can be influenced by various factors, such as changes in the National Bank of Kyrgyzstan's discount rate, which it adjusts in response to inflation levels, the economic situation in the country, and other macroeconomic indicators. Global economic events can also have an impact. For instance, fluctuations in currency exchange rates, crises in global markets or changes in the monetary policy of major countries can affect rates. Finally, domestic factors, including the government's economic policy, the level of liquidity in the banking system and demand for loans can also lead to changes in deposit returns.
Therefore, if the goal is to achieve maximum returns, it's important not to rely solely on the summer months; it is also important to closely monitor interest rate trends and economic news to choose the best time to place a deposit.
