Starting January 1, 2027, Russian banks will begin offering a new financial instrument on a large scale: housing deposits. Kirill Chernovol, Researcher of the International Best Practices Analysis Department at the Gaidar Institute, told the News.ru, how they will differ from regular deposits, who will benefit, and when housing savings can be used for early loan repayment more cost-efficiently.
According to the economist, a housing deposit will differ from a regular one in its designed purpose. Only individuals can open them, and the minimum term will be 3 years. Savings can be used to purchase housing, build a house, participate in shared construction, or repay an existing housing loan at any bank.
However, a housing deposit does not guarantee a higher return compared to a regular deposit. Its attractiveness will depend primarily on the specific bank's interest rate. However, the new instrument does offer additional advantages for those who are truly saving for housing.
"The main advantage of a housing deposit is the ability to separate housing savings from other funds and use them for their intended purpose. This can be especially helpful for people who struggle with financial discipline: funds remain formally available, but using them for other purposes, they will have to be effectively withdrawn from housing savings by closing the deposit.
"Furthermore, if the funds are used to improve housing conditions, for example, to purchase housing or repay a mortgage, the interest on the deposit is fully retained. Another significant difference is the increased insured amount: housing deposits will be insured up to Rb10 mn, compared to Rb1.4 mn for standard deposits," explained Kirill Chernovol.
According to the expert, a home deposit is primarily worth considering for those planning to save for a down payment, purchase a house, or build a house and are willing to contribute regularly. In this case, a target deposit can be a convenient way to gradually accumulate the necessary funds.
However, if the goal is to pay off the mortgage early, a more rational option in some cases may be to gradually repay the loan. This allows to reduce the principal balance earlier and reduce future interest overpayments.
Another feature of the new instrument is the bank's ability to stipulate in the agreement an obligation to provide the depositor with a housing loan subject to compliance with established requirements. However, the client is not obligated to use the loan. This is a standard consumer loan, not a mortgage as defined by mortgage lending law.
For banks, housing deposits will become a source of longer-term financing: a minimum term of 3 years will allow for a more stable funding base. At the same time, the increased insurance amount to Rb10 mn will create additional reserve requirements.