Finnish Households Shift Money to Higher Interest Deposit Accounts, but Overnight Deposits Decline

Ordinary bank customers seeking to capitalize on rising interest rates

As interest rates have risen, Finnish households have shifted their funds from low-interest accounts to higher-interest deposit accounts. During 2023, households transferred a total of 9.3 billion euros to both time and investment deposit accounts. However, the overall household deposit stock, EUR 108.7 billion, shrank by more than EUR 3 billion due to a decrease in overnight deposit accounts.

Despite the decrease in overall deposits, the majority of household deposits remain in overnight deposit accounts, including current accounts. At the end of 2023, 70.6 billion euros of household deposits were overnight deposits, 10.9 billion euros were time deposits and 27.2 billion euros were investment deposits. Households had 40.3 billion euros in listed Finnish shares and 34.1 billion euros in domestic funds.

As interest rates have risen, the interest rate differences between different deposit accounts have grown significantly. The average interest rate on household term deposits and investment deposits has risen rapidly during the year. At the end of December 2023, the average interest rate on the term deposit portfolio was 2.70 percent and the average interest rate on the investment deposit portfolio was 2.46 percent

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