Following the interest rate cut by the Central Bank, banks have started to take action. Downward updates in deposit interest rates have begun. The rapid decline in deposit yields in recent times has been notable. Here is the return of 1 million Turkish Liras in a 32-day term…After the interest rate cut by the Central Bank, banks swiftly started updating deposit interest rates. Last week, the Central Bank reduced the policy rate by 250 basis points from 45% to 42.5% in line with expectations. While banks swiftly adjusted deposit interest rates, they were more reluctant in adjusting loan interest rates. Last week, the highest interest rate in short-term deposit offers by banks was around 47%. In the new week, this rate has decreased to 44%. However, some banks continue to apply interest rates of around 47-48% only to new customers. On the other hand, another factor that lowered deposit yields was an increase in withholding tax. As of February, the withholding tax rate on deposit interest rates increased from 10% to 15%. Withholding tax on time deposits is based on the earned yield, not the total amount deposited. Therefore, the increase in withholding tax leads to a decrease in income earned from interest. The Central Bank began the interest rate reduction cycle by December 2024. The policy rate decreased from 50% to 42.5% over three meetings. Additionally, the withholding tax rate increased from 10% to 15%. Due to these two factors, there was a significant decrease in deposit yields. In December, the return of 1 million Turkish Liras in a 32-day period was around 43,400 Turkish Liras. If a switch to a new bank is not made, the highest interest rate today is calculated to be 33,161 Turkish Liras. Therefore, there was an approximate decrease of 10,000 Turkish Liras in returns over a 3-month period. Deposit Amount: 1 million Turkish Liras Deposit Rate: 48% Deposit Term: 32 Days Net Return: 35,770 Turkish Liras Deposit Amount: 1 million Turkish Liras Deposit Rate: 44.5% Deposit Term: 32 Days Net Return: 33,161 Turkish Liras