All about new bank interest rates and deposit requirements

According to Iran Economist, before this, the last resolution of the Money and Credit Council was in July 2019, in which the interest rate of short-term and long-term investment deposits was defined as 10% to 18%. But this rate is approved by the Money and Credit Council last night It was announced from five percent to 22.5 percent.

Normal short-term investment deposits are deposits that are monthly and have no time limits for depositing and withdrawing. The interest rate of these deposits was 10% until last night, and only this type of deposit faced a decrease in the interest rate and it reached half that is five percent.

The three-month short-term deposit interest rate, which was set at 12% in the last two years’ resolution of the Money and Credit Council, remained unchanged and the same rate was approved in the last meeting of the Money and Credit Council. However, interest on short-term deposits of six months increased by three percent and reached 17 percent from 14 percent.

The 4.5% increase in the one-year long-term deposit interest rate is another item approved by the Money and Credit Council. That is, from today, 20.5% interest will be given to people’s one-year long-term deposits, which, of course, should not be withdrawn.

The two-year long-term deposit interest rate was 18% until last night, which reached 21.5% from today, and the three-year long-term deposits will also receive 22.5% interest according to the new decree, which shows the policy to push Liquidity is directed towards long-term deposits.

Interest on bank loans increased by 5%

Of course, the interest rate of bank facilities, which was 18%, increased to 23%, which means that if you get a loan from the bank, you have to pay five percent more interest to the bank than before.

Of course, last night’s resolution has many differences with the previous resolutions, namely that it has detailed directives for deposits and facilities.

One of these circulars is that if withdrawals are made from the term deposits account before the maturity date, one percent of the interest will be deducted. That is, for example, if a person withdraws from his one-year short-term deposit before its maturity, the interest rate will increase from 20.5% to 19.05%.

However, the interest rate of term deposits will change depending on the durability of the deposit and the interest rate approved for it, and this means that all short-term and long-term deposits, if they remain for less than three months, are subject to only four percent interest, i.e. one percent. It will be less than the normal short term deposit interest.

11% interest is given to short-term deposits of six months and types of long-term deposits that last from three to six months. Long-term deposits of one year, two years and three years will receive 16% interest if they last between six months and one year.

The interest rate of two-year and three-year deposits, which have a shelf life of between one and two years, will be 19.5%, and finally, the interest rate of a long-term three-year deposit, which has a shelf life of more than two years and less than three years, will be 20. It is 5 percent.

Other clauses of the recent approval of the Money and Credit Council are related to the violations that some banks had in the past years regarding the same interest rate and not complying with and circumventing the previous approvals. Therefore, in this resolution, it is emphasized that banks should not violate this interest rate in any way and in their advertisements, they should not refer to anything other than the said resolution.

For example, depositing any money into various deposit accounts is prohibited under the title of excess interest, because sometimes banks do this so that they are not identified and charged by the Central Bank and its inspectors, and on the other hand, they can attract more deposits. do

New deposit condition

Of course, if you currently have a deposit with the bank that is related to before this decree, it will not be subject to the new interest rate until the maturity date, and this decree states that if people want to make a deposit with the new interest rate, they must first open their previous deposit account. By accepting the profit failure rate, close and deposit again.

Dealing with, rejecting the approval of qualification and dismissal of bank managers, including the warnings of the Central Bank and the Money and Credit Council in the recent decree for banks that do not comply with the approved interest rate.

However, for bank facilities, one thing has been mentioned in this resolution, and that is that it is prohibited to receive any cash collateral before or after the granting of the facility or to block a part of the granted facility in any way by the banks.

Of course, this ban has existed in the past years, but some banks have always used this method to grant loans to people, and it remains to be seen what decision will be made to prevent this violation.