Statistical news focuses on the latest figures and trends in Danmarks Nationalbank’s statistics. Statistical news is targeted at people who want quick insight into current financial data.
Private customers' deposit interest is now over 1 per cent in average
In September 2023, the interest on the interest-bearing part of private customers' total deposits moved above 1 per cent on average p.a. This is the first time since the beginning of 2014. The interest-bearing deposits amount to kr. 948 billion out of a total deposit of kr. 1,118 billion. The remaining deposits are invested via pooling schemes and are therefore not attributed to interest, but to an investment return. Private customers' interest-bearing deposits are diverse, and the average interest rate covers several types of deposits with very different interest levels, which currently range from 0 per cent and up to interest of over 5 per cent. Private customers' average deposit rate for September was calculated at 1.04 per cent p.a., and it is expected to increase further in the coming months, as the banks' announced interest rate changes take effect.
Highest deposit rate in almost 10 years
Note:
Average weighted interest p.a. on interest-bearing deposits totaling in Danish kroner from Danish private customers (salaried employees, pensioners, etc.). Interest-bearing deposits are excl. deposits in pooling schemes. Find chart data here.
Special types of demand deposits draw up the interest rates
The majority of private customers' interest-bearing deposits in Danish kroner totaling kr. 948 billion is placed on demand accounts. At the end of September, private customers had kr. 809 billion placed on demand accounts. The deposits on demand can be immediately used for payments and transferred between accounts. The average annual interest rate for this type of deposit was calculated at 0.90 per cent in September. The average interest is elevated from, among other things of private customers' lending-related deposits (e.g. priority accounts), where the interest was most recently calculated at more than 5 per cent. The high interest rate on these deposits is due to the fact that the interest rate on the lending-related deposits reflects the interest rate on the affiliated loan. Disregarding the lending-related deposits, which amount to approximately kr. 46 billion, the average interest rate on demand deposits is reduced by approximately 0.30 percentage points.
Even excl. the lending-related deposits the average interest on demand accounts of approximately 0.60 per cent however - still above the level of interest offered on a typical salary account. The explanation for the higher interest rate is that several banks offer their private customers demand accounts with a significantly higher interest rate than on an ordinary salary account. The higher interest rate will typically be conditioned by the fact that it is, for example, a purpose-defined savings account (e.g. for housing), that there is a limited number of fee-free withdrawals within a given period, or that the customer only gets access to the account type if the customer enters in a certain customer group, which in some cases may be subject to a fee.
Over 5 per cent in interest on private customers' lending-related deposits
Note:
Average weighted interest p.a. on interest-bearing deposits on demand accounts in Danish kroner from Danish private customers (salaried employees, pensioners, etc.). The latest data for lending-related deposits is from August 2023. Regarding September 2023 the values for the interest rates for lending-related and excl. lending-related demand deposits are based on an assumption that the development in these interest rates is equal to the development in the interest rate on total demand deposits for September 2023. Find chart data here.
Time-bound deposits are gaining ground
Interest-bearing deposits with a time commitment have been gained in the past year and contribute to the increase in the average interest rate on private customers' total deposits. The rising interest rate has made fixed-term deposits more attractive, and since mid-2022 it has increased by as much as 55 per cent, corresponding to kr. 49 billion. The increase is mainly driven by deposits with a fixed term of up to 1 year. The average interest rate on the new time-bound deposits is currently 2.80 per cent. The many new time-fixed deposits have meant that the average interest rate for private customers' total time-fixed deposits since mid-2022 has increased from -0.22 per cent. to 1.83 per cent. The interest covers the part of private customers' time-bound deposits that are not linked to a pooling scheme with the purpose to invest the deposit in securities.
Over 5 pct. i rente på privatkundernes udlånsrelaterede indlån
Note:
Average weighted interest p.a. on interest-bearing deposits on fixed-term accounts (time deposits and deposits with notice) in Danish kroner from Danish private customers (salaried employees, pensioners, etc.).
Deposits invested in pooling schemes have no interest, but returns
Deposits linked to pooling schemes for the purpose of investment make up 15.2 per cent of private customers' total deposits, corresponding to kr. 169 billion. These are, for example, deposits associated with pension or children's savings, i.e. deposits, which typically have a relatively long time horizon before they have to be paid out. As the deposit is invested in shares, bonds and via funds, interest is not attributed to the deposit, but the deposit is annually attributed the return that the underlying investments have achieved. Positive as well as negative returns. The total return on deposits invested via pooling schemes will therefore largely reflect market developments. This has meant that the return in recent years, in contrast to deposit rates, has varied significantly: From approximately 0 per cent in 2020 to a double-digit positive return in 2021, followed by an even larger negative return in 2022. So far, the return for 2023 is approximately 3 per cent.
Private customers have different types of deposits
Note:
Outstanding deposits at the end of September 2023 in Danish kroner from Danish private customers (salaried employees, pensioners, etc.). Data for lending-related deposits is for August 2023. The values for the interest rates for lending-related and excl. lending-related demand deposits is based on an assumption that the development in these interest rates is equal to the development in the interest rate on total demand deposits, for September 2023 Year to date (YTD) return for deposits in pool schemes covers the period January to September 2023 inclusive.