Serhiy Mamedov, vice president of the Association of Ukrainian Banks and chairman of the board at Globus Bank, has advised Ukrainians to spread their savings across hryvnia deposits, domestic government bonds and foreign currency rather than relying on a single instrument.
Mamedov said there is no universal formula for allocating savings. He said the right structure depends on a person's financial goals, the size of their capital, their regular expenses and how much risk they are willing to take.
As one possible option, Mamedov suggested a model in which about half of a person's funds are held in hryvnia instruments, with the rest split between foreign currencies. He said the choice of currency should reflect future spending needs. For example, he said people who travel regularly or spend money in eurozone countries would benefit from holding part of their savings in euros, since that would help them avoid losses from currency conversion.
Splitting hryvnia savings
For hryvnia savings, particularly larger sums, Mamedov recommended diversifying between bank deposits and domestic government bonds, known as OVDP. He said buyers of OVDP should weigh not only the yield on offer but also possible bank or broker commissions and the cost of maintaining an account.
Mamedov stressed that his suggested model should not be treated as universal, and that each person should build a savings structure based on their own financial needs and goals.
He also said that waiting for a "perfect moment" to place funds could cost people potential income. He noted that deposit rates of 17 to 17.5% a year are already available on the market, though the exact return and terms depend on the bank chosen and the length of the deposit.
Banks compete for savings
Dmytro Zamotayev, director of the retail business department at Globus Bank, said competition among banks for Ukrainians' savings would intensify in September. He said average rates on hryvnia deposits would mostly range between 13.5% and 16% a year depending on the term, while the most attractive promotional and bonus offers could reach 17.5% a year.
Taras Kotovych, senior financial analyst at the ICU investment group, has previously advised on how best to allocate 100,000 hryvnias a year to at least preserve its purchasing power.
