Deposit Interest Rates Hit a Five-Year Low: What Has Changed?
Returns on household deposits in Uzbekistan’s banks have fallen to one of their lowest levels in recent years. As of the end of June, the weighted average rate on individuals’ fixed-term deposits in Uzbek soums stood at 19.2 percent.
This is the lowest figure recorded since March 2021. While the overall rate for all fixed-term deposits reached 17.6 percent, the average return on legal entities’ funds was 15.3 percent.
However, these figures do not mean that banks no longer offer deposits above 19.2 percent. There is a significant difference between the average statistical rate and a bank’s highest advertised offer.
The decline in household deposit rates has accelerated
In June, the average rate on household deposits fell by 0.5 percentage points in a single month. In April, this figure was still 19.9 percent. This means that returns fell by nearly 0.7 percentage points over two months.
The rate on all fixed-term deposits, meanwhile, stood at 17.6 percent in June, rising by 0.5 percentage points compared with the previous month. At first glance, this may seem contradictory: the overall rate increased, while household deposits became cheaper.
The reason is that the overall indicator includes funds placed by individuals and legal entities for various terms. Changes in the volume and maturity of deposits attracted by banks also affect the weighted average rate.
Why are banks reducing competition for higher interest rates?
It is difficult to explain the decline in interest rates with a single factor. However, the rapid growth in the volume of deposits in the banking system may be one of the key reasons.
According to the Central Bank, total deposits in commercial banks grew from 345.6 trillion soums as of June 1, 2025, to 460.6 trillion soums as of June 1, 2026. Annual growth exceeded 33 percent. The volume of long-term deposits also increased from 128 trillion soums to nearly 168 trillion soums.
When funds are steadily flowing into banks from households and businesses, the need to offer extremely high rates for each new customer decreases. This is not an official explanation, but an economic conclusion based on the statistics.
In other words, while banks previously competed in an interest-rate race to attract funds, the growth of their funding sources now gives them an opportunity to gradually lower rates.
19.2 percent is not a single rate for all banks
The indicator published by the Central Bank is the weighted average rate on deposit agreements concluded across the banking system.
It combines the following factors:
rates at different banks;
short- and long-term deposits;
deposits opened online and at branches;
large and small amounts of funds;
standard and capitalization products.
Therefore, one bank may offer a deposit at 18 percent, while another may offer more than 21 percent, yet their overall average may be 19.2 percent.
In June, bank offers were generally in the range of 16–23 percent. At the end of July, the bank services information portal also listed products offering a base rate of 21.3 percent and returns of up to 23.5 percent when certain conditions were met. Therefore, the conclusion that “the maximum market rate was capped at 20 percent” does not apply to all deposits.
How much difference would there be on a 100 million soum deposit?
In a simple calculation, if 100 million soums is placed for one year at 19.2 percent, the accrued income will amount to 19.2 million soums.
If the same amount is placed in a deposit at 21.3 percent, the income will reach 21.3 million soums. The difference between the two offers would be 2.1 million soums over one year.
However, making a decision based solely on the interest rate is not advisable. A higher rate may come with the following restrictions:
recalculation of interest when funds are withdrawn before maturity;
no option to replenish the deposit;
a ban on partial withdrawals;
the higher rate applies only when the deposit is opened online;
the advertised “up to” rate is available only under specific conditions.
For example, a product advertised at 23.5 percent may have a base rate of 21.3 percent. A customer may read the contract inattentively and mistake the largest figure for guaranteed income.
Will interest rates fall further?
The trend in the coming months will depend on inflation, the Central Bank’s policy rate, bank liquidity and public demand for deposits.
The Central Bank’s leadership previously stated that nominal deposit rates would also decline as inflation fell. At the same time, even if the interest rate decreases, the deposit’s real return may remain high if inflation falls faster.
The current changes do not mean that deposits have completely lost their appeal. On the contrary, the market is moving away from competing solely for the highest interest rate and toward competition over favorable terms, mobile management, capitalization and the ability to withdraw funds freely.
The best deposit is no longer the product with the biggest number attached to it. The best deposit is the offer whose rate, term and conditions for using the money match the customer’s plans. Leave your opinion in the comments and share the article with your acquaintances on Telegram or other social networks!
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