According to the Central Bank of Bosnia and Herzegovina data, at the end of September 2021, the total household deposits with commercial banks in BH amounted to BAM 14.49 billion, this being the highest recorded level. Household deposits had by far the largest share in the total deposits with commercial banks, 53.4%, thus representing an important base for bank financing and functioning.
Observing household deposits by maturity structure, term and savings deposits in September 2021 amounted to BAM 5.46 billion or 37.7% of the total household deposits. Out of it, short-term deposits accounted for BAM 318 million (5.8%), while long-term deposits accounted for BAM 5.14 billion (94.2%). Transaction accounts and sight deposits accounted for BAM 9.03 billion or 62.3% of the total household deposits.
Households in BH continuously increased the total deposits, so, compared to the positions as of the end of September of the previous year, they increased by BAM 1.15 billion or 8.7%. However, there are significant differences in deposit trends depending on the type of deposit. Transaction accounts increased by 19.8% (i.e. BAM 854 million), while sight deposits increased by 9.3% (i.e. BAM 327 million). Term and savings deposits, reflecting savings, slightly decreased at the annual level by 0.6% (BAM 34 million). The stagnation of household term and savings deposits at the annual level was evident since April 2020.
The stagnation of term and saving deposits of households was affected by unfavourable economic circumstances during the pandemic, as income of many citizens decreased, therefore, they could not save as in earlier periods, and used some of their savings to finance their current needs.
Interest rates on household term deposits continuously declined during the recent years. Interest for household EUR denominated term deposits with contracted maturities from 1 to 2 years were decreased from 3.279%, which was the average rate for 2013, to 1.06% in the first eight months of 2021. At the same time, interest rates for deposits with contracted maturities exceeding 2 years amounted to 1.159% in the first eight months of 2021(3.95% in 2013). For the same observed period, interest rates on term and savings deposits of households in BAM with contracted maturities from 1 year to 2 years decreased to 0.719%, while those for maturities exceeding 2 years to 0.957%.
Regional research shows that a rather low number of BH citizens save, around 20% said that they had savings, while only 15% of the citizens included in the survey in 2019 confirmed that they were saving continuously.
A stable domestic banking sector, with a reliable deposit insurance system, offers guarantees to citizens to keep their funds in accounts with banks, through which they carry out their current transactions or save for later periods.
