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Getting the Best Interest rate in Turkey

I hear many questions, debates, and discussions about interest rates in Turkey. After "where can I get the best rate" (easily answered by a quick glance at out our monthly interest rate report), the most popular is "Why aren't I getting a good rate?".

To try and answer this let's look at this in two parts;

1. "The rate I am getting is not what's shown on the monthly report"
2. "Mr X says that he is getting a much better rate"

1. "The rate I am getting is not what's shown on the monthly report (or as advertised on the bank's website)"

Answer 1: Check that you have an E-Deposit account
The quoted rates in the monthly report are the "e-deposit" rates - to be eligible they must be opened and managed online. E-Deposit rates are typically 2% higher than branch rates. So if you're still visiting the bank to sort out your rates - it's time to cut out the middle man and manage your own finances. Online account management is not only simple, but it avoids queues and is cheaper (most Turkish banks charge higher rates for in-branch transactions).

Answer 2: Check that the investment criteria is the same
The quoted rates in the monthly report are based on a criteria: The currency is Turkish Lira, the amount invested is 25,000TL, and the period of the deposit is one month period (30, 31, or 32 days).

Answer 3: The quoted rates are out of date
The report is updated at the end of each month, so it's feasible that the bank has simply updated their rate.

2. "Mr X says that he is getting a much better rate"

Answer 1: Mr X isn't.
Mr X is probably mis-remembering.

Answer 2: Mr X may be.
Mr X may have invested before a recent rate change (perhaps he invested the money 10 months ago when the rate was higher).

Answer 3. Mr X may be.
Mr X may meet different criteria;
   a. different amount of money - the more you invest the higher the rate - typically higher rates attract up to 0.5% more interest.
   b. different time-period - typically longer periods arract up to 0.5% more interest,
   c. sometimes banks offer an introductory rate (see the note below) - typically introductory rates can be up to 2% more (but watch out for the rate change after 6 months).

Introductory rates

Many stories about higher rates start simply start with an introductory rate - the bank entices a new customer with promises of a high rate. Of course, after a short period of time the rate decreases and falls in-line with the bank's standard (non-e-deposit) rates.

 

If you have any comments or advice on this topic, please contact us or leave a comment below.