Russia plans to launch a new financial product – a fixed-term interest-paying account with an extended insurance coverage known as a housing deposit. After the first reading in April 2024, the State Duma may adopt the relevant legislation in the second reading during the spring session, Anatoly Aksakov, head of the lower house committee on financial markets, said.
A housing deposit account is essentially a banking product, designed to help families save up for a home. However, these accounts have several advantages, according to Valery Tumin, country director for Russia and the CIS at fäm Properties.
First, such deposits are insured up to RUR 10 mln ($120,000), compared to the standard deposit insurance amount of RUR 1.4 mln ($16,700). Secondly, they offer guaranteed returns, providing a predictable investment option, as the interest rate is fixed when the account is opened. In addition, when the deposited amount reaches a certain threshold, the bank client becomes eligible for a mortgage to borrow the additional sum they need to buy a home.
However, a housing deposit alone is unlikely to help the buyer save up enough to purchase an apartment without borrowing, due to high real estate prices and limited profitability of bank deposits, the expert warns.
“Housing deposits are effective tools to scrape up a mortgage down payment, which may be useful for young families, or anyone planning to buy bigger or better housing. The popularity of this new tool will depend on a number of macroeconomic factors, such as interest rates and property prices. With the key rate as high as now and subsidized mortgage programs no longer available, housing deposit accounts may become a popular way to save up for a home,” Valery Tumin summarizes.