Kazakhstan Banks Adjust Deposit Rates After National Bank Rate Cuts

Kazakhstan's banks are adjusting deposit rates following two consecutive cuts to the National Bank's base rate. The base rate decreased from 18% in June to 16.75% in July. This led banks to lower yields on deposits, with ten banks revising terms in June and four in July. Savings deposits, particularly those with three- and six-month maturities, saw the most significant rate reductions. Demand deposits, however, remained largely unchanged.

The Kazakhstan Deposit Insurance Fund (KDIF) anticipates further targeted rate adjustments by some banks in August. However, a widespread revision of terms, similar to June, is unlikely. The future trajectory of deposit rates will hinge on the National Bank's next base rate decision, scheduled for September 4.

Currently, savings deposits offer the highest yields, reaching up to 20.5% APR, followed by term deposits with top-up options at up to 20% APR. Demand deposits provide lower yields but offer greater flexibility for accessing funds.

The KDIF cautions that high interest rates often come with stricter conditions. For instance, savings deposits do not permit partial withdrawals. Early termination results in the loss of accrued interest, and funds are disbursed after a 30-day notice period. The fund recommends that customers consider factors beyond the interest rate, such as top-up terms, early withdrawal policies, and insurance coverage limits, when selecting a deposit.