Risk, lose, earn... What investors should do at the peak of the deposit boom

Yekaterina Maksimova

Was the strategy of the Central Bank with a sharp increase and then a decrease in the key rate correct?

Director of the Ural office of the National Association of Stock Market Participants (NAUFOR) Radik Akhmetshin:

-The Central Bank did everything possible to prevent people from running away and massively withdrawing money from their accounts. The regulator saved the banks from panic. The Central Bank fulfilled its task. And now you can reduce the key rate.

Alfa-Bank analyst Natalya Orlova:

- The Central Bank saved the banks and coped with its task. This was evident already at the end of March: ruble attraction stabilized, growth resumed.

Analyst FG "Finam" Igor Dodonov:

-After the West announced tough anti-Russian sanctions, including against the country's financial system, the banking sector experienced a massive outflow of household funds from deposits, which, according to the Central Bank of the Russian Federation, reached 10 trillion rubles. And the March increase is due to the fact that the population returned money to bank deposits, since the conditions for them became very attractive due to the sharp rise in deposit rates following the key rate. The advantage for the Central Bank is that it was possible to prevent the destabilization of the banking system. Depositors were able to get high returns on deposits, albeit short-term ones.

Is it dangerous to keep all your money in ruble deposits in banks in the era of sanctions? Is now the right moment to make a choice in favor of other instruments (savings accounts, brokerage accounts, buying precious metals)?

Radik Akhmetshin:

- There are no fears, which was 3-5 years ago. Most of the trusted and reliable banks remained on the market. If we talk about other tools, now it is absolutely wrong to give some advice. The situation is changing almost daily. But at the moment, it probably makes sense to invest in defensive assets such as gold and silver. And, possibly, in the Russian securities market. They have now become dramatically cheaper, but you can invest in them today.

Natalya Orlova:

-There is a deposit insurance system. In addition, for 5 years there were no precedents for problematic bankruptcies, that is, the Central Bank learned to control the financial situation of banks. Problematic banks are taken for reorganization, so there are no risks for depositors. Other investment instruments are dubious. Since the financial markets are now in a very unstable state, then, of course, there is low liquidity in such professional sections of the market. If earlier there was an alternative where you can invest money, now the range of available financial instruments has narrowed significantly.

Igor Dodonov:

- I don't see any big risks of keeping money on deposits. In recent years, Russian banks have accumulated a significant margin of safety, and with support from the CBR and the government, the sector, I believe, will be able to get through the crisis without losing stability. Although it is possible that some banks, especially small ones, will face difficulties. Therefore, when placing funds, banks still need to remember the limit of insurance compensation for deposits in the amount of 1.4 million rubles.

Under what conditions will Russians continue to have an increased interest in bank deposits?

Radik Akhmetshin:

-Interest will continue as long as bank deposits have a rate of 10% or more. Because now it is one of the interesting sources of investment. As soon as deposits become 4-5%, as it was six months ago, then, I think, there will again be an overflow from bank deposits to the securities market and other instruments.

Natalya Orlova:

-Now we are seeing the concept of forced savings. It implies that the Russians in February and March formed large stocks of goods. And incomes for April-May, people are more inclined to save than before. In addition, for some goods there are interruptions in deliveries, the assortment has been reduced. This also does not stimulate demand in the short term. Therefore, we can say that the concept of consumption has changed for a short, apparently, time. The population of the country is more inclined to save money in anticipation of the normalization of the situation or adjusting their consumer behavior to the new reality.

Igor Dodonov:

-Banks seem to take advantage of the fact that citizens do not actually have other instruments that could provide high returns with low risk. Yields on OFZs and bonds of leading Russian corporate issuers are now comparable to deposit rates and by and large do not have any advantages, and investing in stocks or currencies, especially "exotic" ones, is too risky. The Central Bank of the Russian Federation promised to continue reducing the key rate, and by the end of the year it may fall to the region of 10-11%. Approximately to the same levels, rates on deposits may also fall. At the same time, inflation this year, according to various estimates, will be 18-20%. As a result, at the end of the year, the yield of conservative savings instruments may well lag behind inflation.

In March, deposit rates exceeded the key rate. Is it possible that banks will continue this model?

Radik Akhmetshin:

-Banks are allowed to slightly exceed the key rate in their deposits, but not much, because an excess of somewhere by 1-3% will raise questions from the regulator. The rates have to be worked out, people have to be paid, but where will the banks take this money? And depositors themselves should have doubts if the percentage of bank deposits is higher than the key rate.

Natalya Orlova:

- In March, there was a force majeure scenario, because there was an outflow of deposits, it was important for banks to keep depositors' funds. In addition, at that time there was still no exact understanding to what level the bank could go in its increase, that is, the situation was extremely uncertain. For the near term, as the CBR is on a rate cut trajectory, some divergence may persist. Bank rates follow the key rate with some delay.

Igor Dodonov:

-Currently, banks do not have an urgent need for funding, so I do not expect that deposit rates in the coming months will somehow significantly exceed the key rate (of course, if there is no other big shock).