In Azerbaijani banks, deposits in dollars and euros are accepted, alongside manats. According to legislation, the maximum annual interest rate for the state-insured portion of deposits placed in foreign currency has been set at 2.5 percent.
Modern.az reports that although some banks offer interest rates higher than this limit, such deposits no longer fall under the guarantee of the Deposit Insurance Fund.
For example, in Bank of Baku, the insurance mechanism remains in effect for dollar deposits placed for a period of up to 1 year, and this does not contradict existing rules. However, the situation is different for dollar deposits placed for a period longer than 1 year.
Thus, for dollar deposits placed in Bank of Baku for a period ranging from 12 to 36 months, the annual interest rate is 3 percent and higher. However, according to legislation, the interest rate of a deposit placed in a bank for the maximum insured amount must not exceed 2.5 percent. For this reason, deposits placed with the aforementioned interest rates are not insured by the state.
A similar risk is observed for AFB Bank. In the bank, interest rates for dollar deposits placed for a period of 9–36 months vary within the range of 3–4.5 percent. This means that these deposits also do not fall under the guarantee of the Deposit Insurance Fund.
Experts state that although a high interest rate offer may seem more attractive to the depositor, the absence of an insurance mechanism increases the likelihood of funds being jeopardized amidst banking risks.
