Banks to disclose minimum guaranteed deposit rate from 1 October 2022
Banks must specify the minimum guaranteed interest rate on the first page of a deposit agreement, as well as on their websites and at any bank service points. In an agreement, this rate should be framed and printed in an easily readable font size. Besides, where a deposit agreement is executed online, this may only be done after this interest rate is disclosed to the customer.
The Bank of Russia ordinance on the procedure for calculating the minimum guaranteed deposit rate has been registered by the Russian Ministry of Justice.
Such interest rate means the minimum rate of return guaranteed to depositors if they do not withdraw the funds until their deposits mature, regardless of any other terms and conditions. Together with the table presenting the main deposit terms, this will help customers correctly evaluate marketing offers from various banks and simplify the choice for people.
‘Sometimes, ads show an attractive interest rate, but in practice it turns out that a customer needs to comply with a number of conditions, or this rate is only effective for the first month, or a customer has to pay extra costs to get this rate,’ noted Mikhail Mamuta, Head of the Service for Consumer Protection and Financial Inclusion of the Bank of Russia. ‘Ultimately, it is always customers who should make a choice, but it is essential for them to be aware of the terms they will actually receive.’
The law empowering the Bank of Russia to stipulate the procedure for calculating the minimum guaranteed deposit rate became effective on 3 July 2022. The Bank of Russia allowed three months for the adjustment of market participants’ IT systems to comply with the new regulation.
Banks have been disclosing the total cost of credit in a similar form for several years already.