ISLAMABAD: The average return on bank deposits declined to 4.90% in April 2025, down 12 basis points from 5.01% in March, as per the latest data released by official sources.
On a yearly basis, the weighted average deposit rate has dropped by a steep 541 basis points, down from 10.31% in April 2024.
The bank deposit rate refers to the average interest that banks pay to customers for keeping their money in deposit accounts such as savings or fixed deposits. It is a key indicator of how attractive it is for individuals and institutions to park their money in banks rather than investing elsewhere.
Meanwhile, the average lending rate for all scheduled banks climbed to 12.77%, marking a 38bps increase from the previous month. Despite this monthly rise, it remains 828bps lower year-on-year, highlighting a broader trend of easing interest rates in the economy.
As a result, the banking sector spread—the difference between lending and deposit rates—widened by 49bps to 7.87% in April, compared to 7.38% in March.
Despite a 19.10% year-on-year increase in the total deposit stock, now at Rs30.6 trillion, depositors continue to face negative real returns amid persistent inflation.
The real deposit rate, adjusted for inflation, fell further to -5.36%, representing a 313bps drop from March. However, this figure is 1,141bps higher than the severely negative levels recorded in April 2024.
On the lending side, the real lending rate turned barely positive at 0.19%, down 501bps from last month, but still 622bps higher year-on-year.
The data underscores the continued struggle of savers in an environment where inflation outpaces nominal returns, while banks maintain strong spreads despite monetary easing.
