Cyprus savers earn 0.9% while the eurozone median pays 2.1%

The average interest rate on the stock of household deposits with an agreed maturity in Cyprus was 0.9% in September, against a eurozone median of 2.1%, according to the Central Bank of Cyprus. On a €10,000 deposit, that gap is worth about €120 a year before tax.

The central bank published the September figures on Tuesday. They show a familiar split in the Cypriot market: new money is being paid a little better, while the existing stock of savings still earns some of the lowest rates in the currency union.

A household that opened a new deposit with a maturity of up to one year was offered an average of 1.62% in September, up from 1.35% in August. Companies did slightly better on new money, at 1.70% against 1.56% the month before. Those are averages across banks and products. The rate on a specific offer will depend on the bank, the term and the amount.

The central bank points to the amount of cash already sitting in Cypriot banks. The country’s liquidity coverage ratio, a measure of the liquid assets banks hold against short-term outflows, stood at 305% in September. The European Union median was 182% in June, the latest comparable figure. When banks are already holding more cash than they need, they have less reason to compete for deposits.

Borrowing is closer to the European middle

The picture is different for loans. The average rate on new housing loans fell to 3.88% in September from 4.16% in August. Consumer credit dropped to 6.45% from 7.12%.

Business borrowing moved the other way. New loans to non-financial companies of up to €1 million cost an average of 4.76%, up from 4.45%. Loans above €1 million rose to 4.40% from 3.67%.

Against the eurozone, Cypriot lending rates are broadly ordinary. Outstanding household loans were 0.1 percentage points below the eurozone median, while loans to non-financial companies were 0.3 points above it. New housing loans were 0.2 points below the median and new business loans 0.3 points above.

The central bank also recorded a shift in how mortgages are priced. The share of new housing loans with a variable rate fell from almost 100% at the start of 2022 to 9.8% in September. The bank said part of that could reflect borrowers choosing fixed rates for three to five years before the loan reverts to a floating rate.

What it means for a household

The useful number is not the headline average but the rate on your own account. A deposit that has been sitting at the same bank for years may be earning less than the 1.62% now offered to new customers. Asking for the current rate, or moving the money to a new fixed term, is the direct lever. The central bank’s figures do not compare individual banks, so the work starts with your own statement.

The gap also matters for anyone weighing a savings account against repaying a loan. A mortgage at 3.88% costs more than a deposit at 1.62% pays, before tax. That arithmetic has been true for a while, and September’s figures did not change it.

The Central Bank publishes the interest rate tables with its monthly monetary statistics. Kypri will report the deposit figures when the next set is released.