Greek banks pay households 1.28% on term deposits of up to one year, compared with 2.33% in the euro area (September 2026), according to figures from the Bank of Greece and the ECB.
The gap in returns is attributed by the Competition Commission to the oligopolistic market structure and low customer mobility. Depositors’ inertia is partly due to negative real interest rates amid high inflation, which surged to 5.7% in October, a three-year high, according to ELSTAT.
Interest rate gap between Greece and the euro area for households
September 2026 | Difference between lending and deposit rates in percentage points
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▶ Composite cost of borrowing for households — Overnight deposits
| Country | Cost of borrowing % | Overnight deposit % | Spread (pp) |
|---|
| Greece | 3.31% | 0.03% | 3.28 |
| Euro area | 3.62% | 0.30% | 3.32 |
| Germany | 4.09% | 0.52% | 3.57 |
| Italy | 3.61% | 0.25% | 3.36 |
| Ireland | 3.51% | 0.23% | 3.28 |
| Cyprus | 3.32% | 0.00% | 3.32 |
| France | 3.19% | 0.05% | 3.14 |
| Spain | 2.99% | 0.16% | 2.83 |
▶ Composite cost of borrowing for households — Term deposits
| Country | Cost of borrowing % | Term deposit % | Spread (pp) |
|---|
| Greece | 3.31% | 1.29% | 2.02 |
| Euro area | 3.62% | 2.37% | 1.25 |
| Cyprus | 3.32% | 1.60% | 1.72 |
| Germany | 4.09% | 2.44% | 1.65 |
| Ireland | 3.51% | 2.03% | 1.48 |
| Spain | 2.99% | 2.26% | 0.73 |
| Italy | 3.61% | 2.90% | 0.71 |
| France | 3.19% | 2.62% | 0.57 |
SOURCE: ECB (November 2026)
COMPILED BY: Euro2day
Sources at the Bank of Greece confirm that depositors are “inert” when it comes to moving from ordinary savings accounts to term deposits, even within the same bank. They say, however, that competition has intensified significantly, particularly over the past year, following the creation of a fifth banking pillar with CrediaΒank and Optima Bank.
There has also been considerable activity recently, with the entry of neobanks such as Snappi (Piraeus) and the longer-established Viva, which also offer savings accounts. These traditional and online credit institutions (neobanks) offer rates above 2%, even on small balances or with no time limit.
Supply and demand
With the loan-to-deposit ratio at around 60%, according to the Competition Commission, the domestic banking system faces no significant pressure to raise liquidity. At the same time, high market concentration (the four systemic banks control 94% of the market, compared with 6% for the rest) sustains the oligopolistic structure.
Net interest income as a share of assets (NIM) stood at 2.5% in the first half of 2026, down from 2.7% in 2025, remaining well above the Banking Federation’s 1.5% and securing the groups’ profitability.
The Competition Commission also highlights the responsibility of depositors, who represent the demand side. At the end of 2024, 74.2% of private-sector deposits remained tied up in sight deposit accounts.
Savers take a conservative approach, accepting rates of around 0.03% (Bank of Greece data for overnight deposits in September 2026). This is one-tenth of the euro-area rate of 0.30%, according to the ECB.
Depositors’ reluctance to switch and their infrequent use of bank-switching services allow credit institutions to rest on their laurels and blunt competition. Search costs and bureaucracy mean that monetary policy pass-through remains weak. In the first year of ECB rate rises (June 2022-May 2023), pass-through to deposit rates (the deposit beta) in Greece was only 10%, compared with a European average of 20%, according to S&P.
Interest rate comparison
| September 2026 | Greece | Euro area |
|---|
| Household overnight deposits/Savings accounts | 0.03% | 0.30% |
| New household term deposits (up to 1 year) | 1.29% | 2.37% |
| Total cost of mortgage borrowing | 3.31% | 3.62% |
| Mortgage loans (floating rate, up to 1 year) | 3.72% | 3.89% |
SOURCE: European Central Bank (ECB), Bank of Greece
(November 2026) | COMPILED BY: Euro2day |
ECB data show that the gap is confined to deposits, as Greek mortgage loans remain cheaper than the European average.
The French Livret A model
Among the institutional measures under discussion at the Competition Commission is the French model of state-regulated savings accounts (Livret A and LEP).
In France, these products offer rates set by the state (2.4% and 3.5% from February 2025, compared with 0.05% on a standard savings account). Withdrawals are unrestricted, there is a limit of around €20,000 per depositor, and the funds finance the budget. The banking sector also proposed introducing tax exemptions during the consultation.
The introduction of the Belgian mechanism, based on a “fidelity premium”, is also under consideration. Depositors receive a bonus if they keep their funds in the account for 12 months. The Commission itself, however, has expressed explicit reservations, noting that linking the mechanism to current accounts could further discourage switching and questioning its effectiveness in the Greek context.
Comparison of European savings models
Key features, tax treatment and proposals from the Competition Commission
| Model | How it works | Return (tax treatment) | Competition Commission proposal |
|---|
| Livret A (France) | State-backed savings account with a cap | 2.4% - 4.0% (tax-free) | State savings account |
| ISA (UK) | Individual savings account | Tax-free up to a limit | Tax-free allowance for retail interest |
| Fidelity (Belgium) | Savings account with a 12-month bonus | Base rate + bonus | Products rewarding customers for keeping funds on deposit |
| Umbrella IBAN (EU) | Portability of bank account number | Determined by a mechanism | European bank switching |
| SOURCE: Competition Commission | COMPILED BY: Euro2day |
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The impact of inflation
All of the above takes on particular significance in the current macroeconomic environment. The interest rate spread between new loans and deposits stood at 4.36 percentage points in September. For outstanding balances, the spread rose to 4.53 points in September from 4.44 points in July, according to the Bank of Greece.
With inflation at 5.7% in October, the real return on a deposit paying 0.03% is -5.67%, while it is -4.4% on a term deposit (1.28%) and -3.2% at an interest rate of 2.5% (before tax). When prices continue to rise for an extended period, passively holding savings amounts to a direct loss of purchasing power.
Finally, the Competition Commission’s findings reflect data up to mid-2025 and do not fully incorporate the effects of the recent growth of the fifth banking pillar or the interest rate and cost-of-funding environment since then. Nor do they account for the full risk arising from the US-Iran war and the US midterm elections. Bank of Greece sources also say that competition has strengthened, but it takes time for depositors and deposits to move.
Closing the gap with Europe will depend on how quickly depositors actively seek better returns, the same sources say, highlighting the role of risk (external and country-specific).
Competition Commission responds to Euro2day
In response to the observations above, the Competition Commission gave the following answers to questions from Euro2day.gr:
- “On the interest rate spread: The sectoral study does not take a position on the level of the interest rate spread (the difference between deposit and lending rates). It focuses on deposit rates and does not examine how lending rates are set, as these are less standardised and depend on various factors.
As we also state in the final report, the setting of interest rates on mortgage and business loans takes account of a range of individual and specific factors, including, for example, the size of the loan, the borrower’s creditworthiness and credit history, their broader relationship with the bank, the repayment period of each loan, and whether collateral is provided and its value. For business loans, factors also include, for example, the company’s turnover and profitability and liquidity ratios, among others.
These factors and the high degree of individualisation do not allow general conclusions to be drawn about the practices of banking institutions that would apply to all or a significant proportion of lending products.
- On the issue of risk (the US-Iran war) to which you refer, and its effect on the interest rate spread, aside from the fact that the study does not examine the spread, it also does not examine how deposit rates have been set since mid-2024. By then, the ECB’s “deposit facility rate” (DFR) had already entered a downward phase (lasting until mid-2026, when a slight rise was observed again).
- On state interventions to reduce charges and fees, and other restrictions on loan interest rates or arrangements, and whether these have contributed to some extent to the increase in the spread, it should be noted that state interventions aimed at supporting borrowers were taken into account in preparing the sectoral study. Indeed, they were among the reasons why it was judged that the setting of lending rates did not warrant further investigation.
- On the comparison of deposit rates by bank and product published by the Bank of Greece, it should be noted that transparent charges and the ability to compare rates directly are intended to enable consumers to choose the product they want and, ultimately, move their deposits to the bank offering them the most favourable rate. As the sectoral study’s proposals also make clear, the Competition Commission encourages the use of tools that improve information for depositors and make it easier for them to switch providers.”