Bigbank: a savings deposit is a smart financial tip for housing associations

Using a savings deposit designed for businesses is also an effective financial tip for housing associations. It provides readily available funds in case of unexpected expenses related to the building, while an interest rate of up to 3.8% helps keep up with inflation and generate additional income for the association, explains Aimar Roosalu, head of Bigbank's corporate banking division.

According to Aimar Roosalu, many Estonians already follow financial advice for managing their personal expenses and income. However, surprisingly few of the numerous housing associations across Estonia actively manage their finances. Larger associations often have significant amounts of money sitting in bank accounts. “For larger associations with several hundred apartments, this could amount to hundreds of thousands of euros in free capital—whether it's reserves against unexpected technical system failures, a repair fund, or co-financing for renovation projects. However, the common issue is that they do not want to lock this money into a fixed-term deposit, and money in current accounts earns practically no interest,” says Roosalu. He suggests that both the boards of housing associations and their general meetings should pay more attention to this aspect of financial management.

“Have you considered how much your housing association pays the bank each year for keeping money in the account? Or how much of the association's accumulated assets are eaten up by inflation?” asks Roosalu. He believes that housing association managements should be smart in this regard and actively take advantage of available market opportunities. “By placing your association's reserves, for example, in a Bigbank savings deposit, the money remains readily available for quick use, but instead of paying the bank or battling inflation, the association earns additional income from the savings account. Another important aspect is the lower risk compared to other investment opportunities, as bank deposits are guaranteed by the National Guarantee Fund up to €100,000,” he notes.

The Bigbank savings deposit suitable for housing associations to use alongside a current account does not differ much from a regular business client account. The client can move money to and from the account at any time, and there are no service fees associated with the deposit. The current annual interest rate for Bigbank savings deposits is 2.5%. Over the long term, thanks to compound interest, it is possible to earn over €14,000 in interest income from a sum of €50,000 over 10 years. All new clients who open an account before the end of June will earn even 3.8% annual interest for the first three months.