Interest rates on deposits in Cyprus slightly increased in December 2025 for both individuals and companies. This is evidenced by data from the local Central Bank published on Wednesday, February 25. However, even after the increase, Cyprus still remains among the countries with the lowest rates in the eurozone. In the category of household lending, the island state ranks third from last, and for business — last.
Household deposits: growth exists, but positions remain weak
The rate on term deposits up to one year for individuals increased to 1.2% compared to 1.13% a month earlier. Despite the positive dynamics, the level remains one of the lowest in the eurozone. Only Slovenia with 0.73% and Greece with 1.09% have lower indicators. For comparison, in the Netherlands depositors receive up to 2.23% annually, which is almost twice the Cypriot level.
Experts explain this difference by the high liquidity of the Cypriot banking system. According to the regulator, the liquidity coverage ratio in December 2025 reached 319%. This is significantly higher than the eurozone median value of 191% and the EU average level of 161%. Simply put, banks have sufficient funds, so they do not need to actively attract deposits through high interest rates. An additional factor remains the small scale of the domestic banking market and limited competition.
Rates for businesses — at the lowest level in the eurozone
Interest on deposits for non-financial companies in Cyprus also increased slightly — to 1.27% compared to 1.17% a month earlier. Nevertheless, Cypriot banks offer entrepreneurs the lowest deposit rates in the eurozone. For comparison, in France and Estonia businesses receive some of the highest interest rates for placing funds.
This situation means that keeping excess liquidity in bank accounts becomes less profitable for companies. Many enterprises are considering alternative instruments for placing capital, including investments in real estate, bonds, and international financial markets.
Loan rates are approaching the eurozone average level
If Cyprus is at the bottom of the ranking for deposits, the situation with loan rates is more balanced. Interest rates on existing loans almost correspond to the eurozone median level. The difference for households is absent and equals 0%, and for companies — about 0.3%.
Interestingly, for new mortgage loans for housing purchases, the weighted average rate in Cyprus is 0.3% lower than the eurozone median. This makes the real estate market more accessible for borrowers. At the same time, for new loans to non-financial companies, the rate is approximately 0.6% higher than the average indicator in the monetary union.
What this means for the Cyprus economy
Low deposit interest rates combined with relatively stable lending rates create a specific financial environment. On one hand, banks remain stable thanks to high liquidity. On the other hand, depositors receive limited returns. In conditions of slowing inflation in the eurozone and gradual adjustments to European Central Bank policy in 2026, further changes in interest rates are possible.
For the population, this means the need to approach the choice of banking products more carefully, and for businesses — to seek more effective ways of managing surplus funds. In the coming months, rate dynamics will depend on regulatory decisions and the overall economic situation in the eurozone.