QUESTION: What to do if deposit rates are falling?

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A change in the key interest rate by the central bank always entails an adjustment of conditions in the financial market, including a decrease in yields on new bank deposits. For investors and depositors, this means the need to adapt their savings strategies to continue receiving maximum income from available capital without taking on excessive risks.

To effectively overcome a period of falling rates, experts recommend using the following proven methods and financial instruments:
1. Creating a so-called deposit ladder, where your savings are distributed across multiple deposits with different maturity dates, allowing you to regularly reinvest part of the funds at current market rates.
2. Using floating-rate savings accounts, which provide a certain flexibility and, although they may reduce yields following the market, leave free access to money.
3. Purchasing long-term bonds with a fixed coupon, which allow you to lock in a high yield for several years ahead regardless of future regulator decisions.

Diversifying your savings portfolio across different instruments and placement terms protects you from dependence on one specific market moment. Combining fixed-rate deposits and reliable debt securities will help smooth out the effect of falling rates and keep the overall yield of your savings at an acceptable level.

QUESTION: What to do if deposit rates are falling?

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