Deposits can be made in deposit accounts of domestic or foreign deposit banks. This section provides information on the most common accounts, including for example current accounts and various other accounts designed for saving purposes.
Deposit banks offer a wide range of accounts with different terms and conditions, with the costs and expenditure relating to the accounts varying accordingly. A current account is not generally subject to the same restrictions concerning terms and use (ie withdrawals) as fixed-term deposits.
Before opening an account, it is advisable that you read the account agreement and the related terms and conditions, which are bank-specific. When opening an account, the bank and the customer also agree on other instruments (bank card, online services) that can be used to access the funds in the account or otherwise enable use of the account. It is also advisable that you check the terms and conditions relating to these instruments too.
Currently deposit rates are low
The interest rate paid on a deposit account can be either variable or fixed. A variable interest rate is tied to a reference rate, in which case the interest changes when the reference rate changes. The bank generally deducts a margin from the reference rate, the size of which is determined on the basis of the contract terms and conditions. A fixed interest rate remains unchanged during the lifetime of the deposit, ie it does not change even if the general interest rate level changes.
The interest rate paid on a deposit is generally taxable, and the tax at source is currently 30%. The bank withholds the tax and disburses it directly to the tax authorities, and therefore the account holder does not need to separately declare the interest in the tax form. There is also no need to declare deposits in a Finnish tax declaration. The interest rate on savings accounts for first home purchase (ASP accounts) is tax-exempt.
Deposits are subject to deposit guarantee
Finnish deposit banks are members of the Deposit Guarantee Fund which compensates for funds in a deposit account in case of a bank’s insolvency. The fund’s liability for deposits with any one bank is limited to EUR 100,000 per customer. For further information on deposit guarantee, see the link on the right of the page.
Deposits with foreign banks
There are a number of branches of foreign banks in Finland which accept deposits. Deposits at such branches are subject to the cover scheme of the bank’s home country. Branches are obliged to provide the depositor with information on the relevant deposit guarantee or other comparable cover scheme or the lack thereof as well as changes to previous information provided, in Finland’s official languages (Finnish and Swedish).
None of the foreign banks that currently have a branch in Finland belongs to the Finnish Deposit Guarantee Fund. According to the Deposit Guarantee Schemes Directive, the minimum level of deposit cover in EU member states is EUR 100,000.
30 January 2012