According to data from the Central Bank of Bosnia and Herzegovina, at the end of September 2021, the total household deposits with commercial banks in Bosnia and Herzegovina amounted to BAM 14.49 billion, the highest level ever checked in. Household deposits represented by far the largest share of total deposits with commercial banks, 53.4%, thus representing an important basis for the financing and operation of banks.
Looking at household deposits by maturity, term and savings deposits in September 2021 amounted to BAM 5.46 billion, or 37.7% of total household deposits. Among them, short-term deposits accounted for BAM 318 million (5.8%), while long-term deposits accounted for BAM 5.14 billion (94.2%). Sight deposit and transaction accounts represented BAM 9.03 billion, or 62.3% of total household deposits.
Households in BiH have continuously increased their total deposits, so compared to positions at the end of September of the previous year, they increased by 1.15 billion BAM or 8.7%. However, there are significant differences in deposit trends depending on the type of deposit. Transaction accounts increased by 19.8% (or BAM 854 million) while demand deposits increased by 9.3% (or BAM 327 million). Term deposits and savings, reflecting savings, decreased slightly on an annual basis by 0.6% (BAM 34 million). The stagnation of term deposits and household savings at the annual level had been evident since April 2020.
The stagnation of term deposits and household savings was affected by adverse economic circumstances during the pandemic, as the incomes of many citizens declined. As a result, they were not able to save as in previous periods and used part of their savings to finance their current needs.
Interest rates on household term deposits have been falling steadily in recent years. Interest on household term deposits denominated in EUR with contracted maturities of 1 to 2 years has been reduced from 3.279%, which was the average rate for 2013, to 1.06% in the first eight months of 2021. In at the same time, the interest rates for deposits with maturities contracted over 2 years amount to 1.159% over the first eight months of 2021 (3.95% in 2013). For the same period observed, the interest rates on term deposits and savings of BAM households with maturities contracted from 1 year to 2 years decreased to 0.719%, while those for maturities greater than 2 years to 0.957%.
Regional research shows that a rather low number of citizens of Bosnia and Herzegovina are saving, around 20% said they had savings, while only 15% of citizens included in the survey in 2019 confirmed that they were saving continuously.
A stable national banking sector with a reliable deposit insurance system offers citizens the guarantee of keeping their funds in bank accounts, through which they conduct their day-to-day transactions or save for future periods.