SEB plans to pay interest on demand deposits
SEB wants to start paying interest on demand deposits in the near future. Other major commercial banks have no such plans and are instead trying to get customers to use fixed-term deposits.
Commercial bank SEB has plans to pay interest on demand deposits, which make up around 70 percent of all private deposits it handles.
Member of the board Ainar Leppänen said that SEB will be paying interest on all private demand deposits, with the details to be unveiled in the coming days. He added that the interest paid will be lower than that for term deposits.
The banker remarked that the interest on demand deposits is usually around 0.25 percent in other countries in the region.
Market leader Swedbank has no plans to pay interest on demand deposits but offers a savings deposit where the rate on offer is 1.75 percent. SEB offers a similar product and a rate of 1.8 percent.
LHV and Coop Pank gave more or less the same reply. The Bank of Estonia on Thursday said that commercial banks' solid profits have less to do with the Euribor rate and more with low interest expenses, urging banks to offer interest also on demand deposits.
The central bank noted that while the weight of fixed deposits used to be on par with that of demand deposits, it is half that today.
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Editor: Barbara Oja, Marcus Turovski
