The volume of Ukrainians' funds in the banking sector has been growing over the past two years, which indicates confidence in the banking system. The National Bank is also working to increase the attractiveness of hryvnia instruments for saving. This opinion was expressed by Andriy Dubas, President of the Association of Ukrainian Banks (AUB), in an exclusive commentary to UNN.
The funds of individuals in banks, if we speak in general, are growing. There are several reasons for this. First, the reason for the growth of individuals' funds in the banking sector of Ukraine is that the domestic banking system is highly developed and convenient. Second, Ukrainian banks are reliable and stable. Following the banking sector reforms that began in 2014, the sector is now highly liquid, strong, and resilient. The increase in the amount of funds of individuals and legal entities in Ukrainian banks confirms that our banking sector continues to be trusted and this trust is growing
According to the president of the Association of Ukrainian Banks, in the context of a full-scale Russian invasion, the National Bank of Ukraine is working to make it more attractive to keep savings in hryvnia, as well as to ensure that banks and financial institutions offer hryvnia instruments that will ensure the purchasing power of the hryvnia as the national currency. This will help offset inflation and devaluation processes associated with temporary currency fluctuations.
"The NBU has once again cut the key policy rate and today it is 13%. Of course, banks are responding to this and are also revising rates in their deposit programs. Everyone can do a simple calculation. According to the latest NBU data, the inflation rate in Ukraine is 4.8%, and the annual interest rate on bank deposits is about 14% on average. Even if the inflation rate at the end of the year is in the range of 8-10%, it will be a favorable offer, as the income from the deposit, even after taxes, will cover the negative effect of inflation. Thus, the purchasing power of the hryvnia placed on a bank deposit remains at a decent level," Dubas said.
According to him, hryvnia assets are currently in demand, which is confirmed by the fact that the volume of individuals' funds in Ukrainian banking institutions has been growing for two years.
Olena Sosedka, co-founder of Ukraine's first fintech ecosystem Concord Fintech Solutions, shared her tips on choosing a reliable bank for deposits, calculating passive income from deposits, and taking into account factors such as interest rates, deposit terms, taxes, and currency fluctuations to preserve and grow savings in the face of economic instability.
In addition, the expert explained what to look for to protect yourself from losing money. Among other things, the expert advises to always rely on the worst-case scenario when obtaining a loan. In particular, you should assess your own ability to repay the loan in the event of a decrease in income or unforeseen expenses. For more information on what else to look for when taking out a loan, read link.