The ECB's base interest rate hikes have sent commercial banks in Estonia hiking the rates they offer on fixed-term deposits, which as recently as at the start of the year were just 1.5 percent.

Luminor Bank hiked the rate it offers for a deposit with a fixed period of one year to 3.5 percent from May 11.

"The offer will initially be valid for two weeks, while we always have our eye on the market and want to offer our customers competitive rates," Kaspar Kork, head of customer service at Luminor, told ERR.

The six-month deposit rate is 1.75 percent at Luminor.

Competitor LHV ran a campaign from late April to May 3 that saw 12-month deposits fetch a rate of 3.5 percent but decided to stick with it once the campaign ended. A deposit for six months fetches 2.6 percent interest.

The rates are 3.5 percent for an annual deposit and 2.55 percent for the semi-annual at Coop Pank.

The smaller Holm Bank offers a return of 3.55 percent for a 12-month deposit, which drops slightly to 3.5 percent at Bigbank.

Estonia's leading commercial banks Swedbank and SEB offer 3.35 percent and 3.25 percent respectively on one-year deposits.

Rates of return on deposits depend primarily on how easy it is for banks to raise money from international financial markets. The until recently negative interest environment did not motivate banks to offer returns on deposits, while this has now changed with the ECB's base rate hikes.

--

Follow ERR News on Facebook and Twitter and never miss an update!