Czech National Bank offers regions a savings account at 3.7%

The Czech National Bank (ČNB) has launched a new savings account for municipalities and regions, offering better terms than commercial banks with no restrictions on withdrawing funds. The initiative has the backing of Prime Minister Andrej Babiš's government (ANO), which wants local and regional authorities to place more of their spare cash in the state treasury.

A higher rate than commercial banks offer

Officials in the Plzeň Region offered an example: in early September they said the region's commercial bank deposits earned between 2% and 3.46%, while a three-month term deposit at the ČNB was already paying 3.5%. The new central bank savings account now yields a further 0.2 percentage points more — around 3.7% a year — with no notice period required to withdraw the money.

Why the state needs this

Andrej Babiš's government (ANO) wants municipalities, and regions in particular, which together hold around CZK 600 billion in their bank accounts, to move more of that money into the central bank. That would let the Finance Ministry place or invest the surplus on the financial market in the short term, which would also help with managing the state debt.

“Local and regional authorities will be able to place their funds completely safely and profitably, without losing instant access to their own money. By managing these voluntarily deposited funds more efficiently, the state will reduce its reliance on more expensive market financing and cut the cost of servicing its debt. At the same time, municipalities and regions won't lose control over a single crown,” said Finance Minister Alena Schillerová (ANO).

When regions and municipalities transfer money to the central bank — currently around CZK 23 billion sits in such accounts — the funds enter the state treasury system managed by the Finance Ministry.

“The ministry also sets the interest rates for state treasury clients. We're working to offer regions and municipalities banking terms attractive enough, as early as this autumn, that local governments will no longer have a reason to keep their money elsewhere for that reason alone,” said ČNB board member Jan Kubíček.

Why municipalities have been slow to move their money

The Finance Ministry has long pushed for municipalities and regions to place more money in the state treasury, pointing out that large balances build up in local government bank accounts and often earn only minimal interest, while the state still has to pay interest on its bonds.

Municipal and regional leaders countered that until now the ČNB had only offered them term deposits, and some local officials also complained that the central bank's online banking wasn't yet user-friendly enough. Municipalities and regions are also reluctant to jeopardize relationships with commercial banks, which they may need for things like loans.

According to the Finance Ministry, municipal bank account balances — including the budgetary organizations they have set up — stood at CZK 475.2 billion at the end of June, up CZK 42.2 billion since the end of last year. Regions and their budgetary organizations held CZK 145 billion in bank accounts at mid-year, meaning their balance grew by CZK 40.5 billion over the first half of the year.

A new service from the central bank

According to ČNB Governor Aleš Michl, the new offering is another step toward streamlining the state treasury. “Last year we introduced instant payments, so money now reaches state accounts immediately. Today we're adding a savings account that municipalities and regions will be able to open electronically and manage from anywhere,” he said.

The new ČNB account is open to territorial self-governing units — municipalities and regions — as well as voluntary associations and municipal unions. It can be set up electronically, and the ČNB's online banking is available to manage it. The new savings account will also allow everyday payments to be sent and received, or debit cards to be used, so there will no longer be any need to transfer money between a current account and a savings account.

Read also: Savings accounts in Czechia: bank rates for 2026

Source: novinky.cz