The ECB announced Thursday that it had decided to hike key interest rates by 25 basis points again as of next week, and on Friday the six-month Euribor, or Euro Interbank Offered Rate, reached more than 4 percent.

Following the euro area central bank's latest decision, the interest rate on the deposit facility will be increased to 4 percent.

Banks in Estonia for the most part haven't yet decided whether to raise their own interest rates on term deposits as well. Coop Pank, for example, which currently offers an interest rate of 4.25 percent a year on 12-17 month term deposits, told ERR that they are currently monitoring the situation.

"We will adjust the interest rates offered on term deposits in accordance with the market situation, and announce any changes as they take effect," Coop Pank CFO Paavo Truu said on Friday.

SEB, where the current interest rate likewise stands at 4.25 percent, told ERR much the same.

"Whether term deposit interest rates will change any further in the near future depends on the market situation, among other things," said SEB retail banking director Ainar Leppänen. "We're monitoring this, and are prepared to adjust interest rates accordingly as well."

Swedbank, meanwhile, is already planning on raising its deposit interest rates, and will be announcing its new rates on Monday, Swedbank Private Customer Division director Tarmo Ulla told ERR.

Their current interest rate on 12-month term deposits is 4.25 percent as well.

Interest rates expected to fall

Banks are justifying their caution with the fact that interest rates aren't forecast to continue to rise, and that interest rates on term deposits remain higher than both the Euribor and the interest rate on the central bank's deposit facility.

Leppänen said that financial gurus are generally anticipating that the ECB will start lowering interest rates again in mid-2024, and when that happens, that may start impacting the level of interest rates offered on term deposits, which may begin to fall as well.

"Therefore it would be prudent for those who want to earn income off of high deposit interest rates to consider this opportunity right now already," he added.

Truu likewise said that they're seeing that the economy has sufficiently cooled already, and aren't expecting key interest rates to be raised any further.

"The six-month Euribor rose minimally in response to Thursday's decision, reaching the nearly 4 percent mark," the Coop CFO noted. "Based on the ECB's messages, longer-term interest rates even fell. All of this gives us reason to believe that they're rather seeing a sufficient cooling of the economy right now, and we may not even see future interest rate increases."

LHV treasury director Kadri Haldre likewise said that as we're currently on the threshold of peak interest levels and interest rates are slated to decrease gradually in at least the 12-month perspective, that will also be taken into account when it comes to longer-term deposit interest rates.

"In order to benefit from the current, even very good deposit rates in European terms, it's worth taking advantage of the opportunity for those interested," Haldre added.

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