When we talk about interest rates in Slovenia, we almost always talk about loans. That makes sense, because when EURIBOR rises, monthly instalments on mortgages rise as well, which people feel directly and painfully. Less obvious, however, is that a rising EURIBOR also affects deposits, often much more than we imagine. If a rise in EURIBOR means a burden for borrowers, that same change can mean an opportunity for savers.
What EURIBOR is and why it affects deposits
EURIBOR is the price of money, or the interest rate at which European banks lend money to one another. When it rises, it means conditions are tightening, liquidity is becoming more expensive, and banks are becoming more cautious. In such an environment, banks start relying more on household deposits because they are more stable, predictable, and relatively cheaper than other sources. This makes it easier for banks to maintain lending activity and balance-sheet stability, while also reducing their dependence on short-term and more volatile interbank funding.
Why banks raise interest rates on deposits
When EURIBOR rises, borrowing for banks on the interbank market becomes more expensive. If a bank can get money from a customer at 1,5 %, that is often better than borrowing it on the market at 2 % or more. That is why banks start raising interest rates on deposits, not because they want to be generous, but because the economics push them to do so.
Why interest rates on deposits often rise with a delay
Interest rates on deposits do not rise immediately when EURIBOR rises. One reason is the structure of the Slovenian banking market: for years, banks have had excess liquidity, and a lot of money sits in demand accounts where it either earns no interest or only minimal interest. If banks do not urgently need deposits, they will not chase them with higher interest rates either.
The second reason is psychological: Slovenians rarely switch banks, and deposits are “sticky”. Banks therefore often wait for the competition to make the first move. When one bank raises interest, the others follow, but always with a delay.
When real competition between banks begins
When EURIBOR keeps rising, sooner or later interest paid on deposits also starts to rise. It usually starts with smaller banks, which have a greater need for liquidity. Large banks follow when conditions tighten enough or when deposits start flowing out.
In such a period, the differences between banks usually grow, so it pays to compare offers. There is nothing wrong with having an account at one bank and a deposit at another. For a quick overview of offers, use the deposit comparison.
Strategy for savers in a period of rising interest rates
For the average saver, a period of rising EURIBOR can be a period of opportunity. The biggest mistake is locking in for too long. If you expect interest rates to rise in the coming months or over the next year, then a 24-month fixed-term deposit today may not be the best decision. It makes more sense to choose a 3- or 6-month term so that, when you renew, you can take advantage of potentially higher interest.
Example: how much the difference in the interest rate means
Let’s say you have 10.000 €. If you get 1,5 % interest today, you will receive 150 € after one year. But if the interest rate rises to 2 % in a few months, you will receive 200 € for the same term. The difference is 50 €. At 50.000 €, the difference is already 250 €, and at 100.000 € it is 500 €. To calculate your own scenario, use the deposit calculator.
Why money in a demand account is often the most expensive decision
Another common mistake is that people leave money in a demand account where it earns no interest at all. If inflation is 3 % and the interest on a demand account is 0 %, that means your money loses 3 % of its value every year. It is a silent cost that most people do not even notice because it does not show up on the statement. To get a more concrete sense of how much this can cost you, use the lost interest calculator.