How Banks Manipulate Deposit Yields: Top 5 Cases from Real-life Practice of Lawyers

Deposit rates in Ukrainian banks have remained stable for the third month in a row. At the same time, most bankers asked by “Minfin” claim that they are interested in attracting hryvnia resources from private clients for term deposits. However, since they cannot afford to increase deposit yields, they are looking for other opportunities to interest potential depositors. Sometimes, though, the ideas that financiers come up with are not entirely clean. “Minfin” asked lawyers to share stories how banks cheat with deposit offers and how to read a deposit agreement correctly in order to immediately reveal the trick.

Over the past two weeks, only one financial institution with a deposit portfolio of individuals of up to UAH 2 billion has made a small adjustment: Crystalbank reduced the rate on three-month hryvnia deposits by 0.25 percentage points to 16.75% per annum. All other banks have kept their deposit offers for private clients unchanged. A similar situation is observed in the group of large banks.

Financiers explain this lull by the fact that the profitability of deposits has reached its economically justified level, and therefore there is no talk of raising rates in the near future. At the same time, financiers are interested in attracting money from the population, while individuals themselves actively brought money to banks again in the fall. Thus, in September 2025, deposits of private clients in hryvnia increased by UAH 19.2 billion to a new historical record of UAH 886.15 billion. The annual growth rate was the highest in 11 months – plus 15.7%.

Therefore, the struggle for money-rich clients between banks is intensifying. Still, since financiers cannot afford to lure them with increased rates, they offer other bonuses. “Minfin” has already written about how you can earn more on a deposit when the yield on deposits is not increasing. But there is another side: sometimes banks manipulate information about the terms of placing a deposit and create a false impression among customers about the real earnings on the money placed on deposit. We will discuss this issue separately.

How banks play with profitability

Maksym Cherednichenko, a lawyer at the Law Firm “Maxim Boiarchukov and Partners”, told “Minfin” about the main marketing techniques of banks that create the illusion of higher profitability for the client.

1. Non-standard placement terms: a deposit may be presented as a “three-month”, but the agreement indicates 92 or 95 days. This difference affects the calculation of the effective rate and complicates comparison with other banks. From a legal point of view, the term in the agreement is decisive – specific start and end dates, or the number of days.

Any advertising formulations have no legal force if they are not reflected in the text of the agreement.

“Minfin” calculated the difference between the real and expected earnings in such cases. Thus, if the advertising offer refers to 17% per annum for a three-month deposit, and the real placement period is 95 days, then the real rate for 90 days at 17% per annum for 95 days is about 16.95% per annum.

In total:

◉ At a rate of 17% per annum, the depositor will receive UAH 418.84 in 90 days.

◉ At a rate of 16.95% per annum, he will receive UAH 418.08 in 90 days.

The difference between these two options is small — UAH 0.76. However, we based the calculation on a short-term deposit and a relatively small amount. For longer terms and larger amounts, the discrepancy may be more noticeable.

2. Fees for withdrawals: the impact of related products. A common practice is to combine a deposit with a card account.

Interest and the deposit amount are transferred to a card, for the servicing of which fees may apply:

◉ for cash withdrawals (approximately 1%);

◉ for “untargeted” interest accrual (up to 0.5%);

◉ for other services, in particular, SMS-informing.

Thus, net profit depends not only on the terms of the deposit, but also on the tariffs of the card account, which the bank has the right to change unilaterally.

Recommendation: before signing a deposit agreement, study the tariffs of the card to which payments will be made.

3. Capitalization of interest: legal risks in case of early termination

Capitalization involves adding interest to the body of the deposit. In marketing, this is presented as a way to get “interest on interest”. However, banks often offer a lower base rate for such deposits, and in case of early termination, all capitalized interest is transferred at the minimum rate – 0.01% or 0%.

As a result, the depositor may lose income for the entire period, even if the funds have been in the account for several months.

4. Automatic prolongation: extension at a new rate

Most agreements provide for automatic extension of the deposit if the client does not submit an application for a refund. However, the extension takes place at the rate in force at the bank on the date of extension, and it may be significantly lower than the initial one.

Therefore, it is important to check the clause on automatic extension and the possibility of refusing it without penalties within a certain period.

5. Additional verification of the sources of origin of funds before issuing a deposit, during which interest on the deposit is not accrued.

Recently, lawyers have identified many cases when banks do not pay interest to clients for the use of their money for a certain period of time.

“Our lawyers had to participate in one interesting case. The client placed a fairly large amount under a deposit agreement with the bank. The agreement was impeccable. A few days before the expiration of the agreement, the client notified the bank of his intention to withdraw funds from the deposit account, to which he received a response that there were suspicions about his funds, and the compliance department requires information about the sources of origin of the funds placed on the deposit account.

The client provided tax returns confirming that the main source of origin of the funds was income declared as a result of the tax amnesty, and taxes were paid from them. To this, the bank provided an official response that it, as a subject of primary financial monitoring, may independently establish its own internal compliance rules. So, paying state tax on the legalized amount of previously undeclared income is not an indulgence for income that does not have documentary confirmation of its origin.

Of course, the bank set a deadline for providing confirmation of the sources of income. The funds in the deposit account were blocked for the client for two months, but not for the bank, at that time it disposed of them at its own discretion without accruing interest on the deposit,” Volodymyr Harkusha, managing partner of K.A.C. Group, told.

Maksym Cherednichenko advises paying attention to the following points when reading the deposit agreement:

◉ Term: check the exact dates or number of days, not just “3 months”.

◉ Rate: make sure that the annual rate is indicated, not the “rate for the period”.

◉ Interest payment: monthly, quarterly, with capitalization or after the expiration of the term.

◉ Refund of funds: to which account is the payment made and whether there are any fees.

◉ Taxes: in 2025, the general taxation of income from deposits is 23% (18% personal income tax + 5% military levy).

◉ Auto-prolongation: whether there is a period for cancellation without a penalty (as a rule, it is 5 days).

◉ Factual rate after taxes and fees. At an advertising rate of 15% per annum, the depositor actually receives about 10.4% net after deduction of taxes (23%) and standard fees (approximately 1.5%).

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