Whether or not they are acting in concert is not clear.

Tarmo Ulla, Head of Private Banking at Swedbank, told ERR that his employer monitors changes in the interest environment on a daily basis, plus also look at how the other banks are reacting to the changes and adjust deposit interest rates according to the picture at the time.

Ulla also recommended a specific Swedbank product for those customers who want some flexibility in both regularly saving and in using the bank as a daily checking account.

Kadri Haldre, Head of LHV Treasury, told ERR that while they have a general current account interest rate of 0.01 per cent, the interest rate for preferential and private client accounts stands at one per cent.

However, if an individual has money in their account that they are not likely to need over a lengthy period of time, she recommended setting up a term deposit and earning higher interest in that way.

"For any bank, deposits are a source of issuing loans. In turn, a term deposit is more valuable for a bank, as it allows the advance planning of when deposits will have to be repaid to a client," Haldre said, by way of explanation over the low interest rates paid on ordinary accounts.

Haldre added that interest rates on term deposits are also higher at the moment as a result of the expectation that interest rates will continue to rise, while the interest on term deposits reflects the average interest rate for a deposit period.

Evelin Koplimäe, sales manager at SEB's private client segment, also advised keeping funds in a deposit with an interest rate of 1 per cent per annum, rather than a current account.

This could be accessed without penalty, if a three-day notice period was given, she said.

Interest rates on term deposits have been raised repeatedly by the banks this year, and currently stand at 3.5 percent over the year, at several banks, ERR reports.

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