Following the interest rate cut by the Central Bank, banks have sprung into action. Downward adjustments in deposit interest rates have begun. The rapid decline in deposit returns in recent times has drawn attention. Here is the return on a 1 million lira deposit in a 32-day term…After the interest rate cut by the Central Bank (CBRT), banks rapidly started to update deposit interest rates. Last week, the CBRT lowered the policy rate by 250 basis points to 42.5% from 45%, in line with expectations.Banks swiftly made adjustments to deposit rates, while they lagged behind in adjusting loan rates. Last week, the highest interest rate offered by banks for short-term deposits was around 47%.This rate has now fallen to 44% in the new week. Some banks continue to apply interest rates of 47-48% only to new customers. On the other hand, another factor reducing deposit returns was the increase in withholding tax. As of February, the withholding tax rate on deposit interests increased from 10% to 15%.Withholding tax on term deposits is deducted from the interest earned rather than the total amount deposited. Therefore, the increase in withholding tax leads to a decrease in income from interest. The Central Bank initiated an interest rate reduction cycle as of 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 returns. In December, the 32-day return on 1 million lira was around 43,400 lira. Without switching to a new bank, the highest interest rate today is calculated at 33,161 lira. Therefore, there has been a decrease of approximately 10,000 lira in returns over a three-month period.Deposit amount: 1 million liraDeposit rate: 48%Deposit term: 32 days Net return: 35,770 liraDeposit amount: 1 million liraDeposit rate: 44.5%Deposit term: 32 days Net return: 33,161 lira