Czech banks change savings account terms, rates up to 5.2%

Czech banks are changing the terms of their savings accounts: after the rate rises they are again offering high interest, but the maximum has become harder to get. The best offer right now comes from Česká spořitelna — up to 5.2% a year, with inflation at 2.5%.

The turnaround began with the Czech National Bank’s June increase of its base rate. “This way we motivate people to save,” the bank’s governor Aleš Michl explained at the time. Three years ago the best savings accounts paid around six percent, then rates fell to an average of three. Since August, Air Bank, Fio banka, J & T Banka, Trinity Bank and UniCredit Bank have raised theirs too, mostly by tenths of a percentage point.

Who gets the top rate

Česká spořitelna, the country’s largest bank, used to tie its interest mainly to investments or retirement savings. That is no longer the case. “What matters now is how a person looks after their financial health,” said bank spokesman Filip Hrubý. Clients are rewarded, for example, for the amounts they set aside for retirement, or for having a mortgage or a credit card.

The programme is called Level Up: clients earn points and fall into one of five levels with rates from 0.2% to 5.2%. The top level requires 18 points, which can only be earned by using a number of the bank’s other products. Within a level, clients can raise their rate slightly or choose travel insurance instead.

Terms at other banks

Air Bank has tied its top rate to regular saving. According to Michal Kuzmiak of the bank, this should help people build a habit of putting money aside. Existing clients have to switch to the new interest scheme themselves in internet banking. For now, according to the bank’s website, they keep the bonus for card payments and incoming payments; without it the rate is two percent.

At UniCredit Bank the top rate depends on card payments and investments. “The maximum rate can be obtained by clients who pay by card at least ten times a month and at the same time invest regularly at least two thousand crowns a month, or a one-off sum of at least 50 thousand,” said spokesman Petr Plocek. A slightly lower rate goes to those who pay by card and receive at least 20 thousand crowns a month into their account. Without any conditions, the rate is 0.01%.

A higher rate without card payments and investments is available on term deposits, but the money cannot be withdrawn without a penalty before the agreed period ends. Moneta Money Bank raised rates on short-term term deposits in mid-September, said spokeswoman Tereza Ryšanová. Komerční banka and UniCredit Bank have also raised them on some deposits.

Since spring, savings accounts have also faced competition from the state savings bonds Dluhopisy Republiky, which the state has already issued twice this year. Those who bought them in the autumn can earn more on them than on most savings accounts.

Read also: Mortgages in Czechia for foreigners: who can get one and how much of your own money you need

Around Prague, based on reporting by novinky.cz