The Estonian-owned Holm Bank has decided to raise the interest rates on its term deposits to 4.5% regardless of the term of the deposit in question. This means that clients can now grow their money at a high rate of interest whether they deposit it for three months or three years – even up to a maximum of five years. The interest will be calculated on an annual basis: for example, if the money is deposited for a period of two years, the client will earn a total of 9% interest on the original amount.
The bank’s CEO, Kaspar Kalvet, says that offering the best term-deposit interest rates on the market has been Holm’s competitive advantage and the promise it has made to its clients since it gained its banking licence in 2019.
“Given that the European Central Bank decided in mid-September to once again raise the reference rate, it’s only right in our view that we give consumers the chance to earn even more interest on their savings,” he explained.
Kalvet says that in general, the highest chance of earning is offered by banks on 12-month deposits. However, this means clients are faced with a difficult choice: they want to grow their money at the highest possible rate of interest, but many are hesitant to put their savings out of reach for an entire year, be it due to the uncertainty in the economy or because of potential changes in their own plans.
“We made the decision to free clients from having to make that decision,” Kalvet said. “Throughout October we’ll be offering an interest rate of 4.5% on all term deposits. That way people can get their available funds earning for them for however long they choose to do so, from as little as three months to as much as five years.”
Kalvet says that clients who are more aware of the options available to them tend to divide their savings up between categories, depositing larger amounts and money being set aside for future plans for longer periods and placing smaller amounts designed for peace of mind in one or more shorter-term deposits. “That strategy ensures that you’re constantly earning and enables you to secure a higher interest rate for a long period,” he said.
According to Kalvet, such high rates of interest being offered on term deposits on such good conditions remains the exception rather than the rule. “A lot of analysts predicted in September that the reference rate wouldn’t be raised,” he explained. “Since inflation has eased off, then both the reference rate and the interest rates on deposits will start tailing off sooner or later. So the chance to secure yourself an interest rate of 4.5% for up to five years – when as soon as next year it will significantly exceed the 3.4% inflation rate most recently predicted by Eesti Pank, as well as the Euribor rate – is an investment that’s definitely worth considering.”
The 4.5% interest rate applies to all new deposits opened in Holm bank in October. Holm’s deposits, like those of all banks registered in Estonia, are backed by the Guarantee Fund to the value of 100,000 euros.
Holm Bank AS is an Estonian-owned bank with an operating licence issued by the European Central Bank. The bank owns the trademarks Liisi and Holm. The bank’s services include term deposits, physical and virtual credit cards, retail and corporate financing and instalment loans. It also offers term deposits in Germany and Austria and owns Holm Bank Latvia SIA, which operates as a financial services provider in Latvia.
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