Greek banks are lowering interest rates on term deposits, a move aimed at protecting profitability in an era of cheap money but leaving savers with significantly smaller returns.

According to figures from the Bank of Greece, rates on new term deposits dropped notably in June 2025 compared with the same month last year. For households, the average return fell to 1.20% for deposits up to one year, down from 1.86%, and 1.17% for longer-term products, down from 1.79%.

Businesses saw even sharper declines, with rates on deposits up to one year dropping from 3.16% in June 2024 to 1.72%, and for deposits over one year from 1.96% to 1.35%.

Impact on banks and savers

Analysts note that while lower deposit rates reduce income for households and companies, they ease interest expenses for banks. The weighted average rate on outstanding household deposits has already fallen to 1.39% from 1.85% last year, while for businesses it dropped to 1.78% from around 3%.

This trend, experts argue, gives banks room to further cut costs in the coming quarters, offsetting weaker revenues from loans. Institutions with a higher share of term deposits stand to benefit most, as even small rate adjustments can translate into larger savings.

How deposits are distributed

By the end of June 2025, Greek households and non-financial businesses held a combined €199.72 billion in bank deposits. Of this, €45.96 billion — about 23% — was placed in term deposit accounts. This is slightly down from December 2024, when term deposits reached €48.8 billion (25% of the total).

The distribution, however, varies across banks:

  • Alpha Bank: €51.3 billion in deposits, with term deposits making up 27% (€13.85 billion).
  • Eurobank: 34% of its €78.2 billion total deposits were in term accounts (€26.59 billion).
  • National Bank of Greece: the lowest share, with only 20% (€11.32 billion) of €56.6 billion in term deposits.
  • Piraeus Bank: slightly higher at 21%, equal to €13.23 billion out of €63 billion in customer deposits.

What comes next

Analysts believe there is still significant scope for further reductions, particularly for banks with a larger share of term deposits. While this strategy strengthens balance sheets, it underscores the limited returns currently available to Greek savers.