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Term deposits in Bangladesh’s banking sector grew more than 14 per cent year-on-year in the first quarter of 2026 as savers increasingly locked their money into fixed-income products to earn higher returns amid elevated interest rates.

According to the latest Bangladesh Bank data, outstanding term deposits rose to Tk 10.39 trillion at the end of March from Tk 9.10 trillion a year earlier, registering a 14.15 per cent increase.

Term deposits accounted for 48.16 per cent of total deposits during the January-March period, highlighting customers’ growing preference for longer-term savings instruments.

Bankers and analysts said higher deposit rates under the market-based interest rate regime, tight monetary policy and persistent inflation encouraged households and businesses to shift their savings from liquid accounts to fixed deposits offering predictable returns.

Overall deposits in the banking sector increased 12.22 per cent year-on-year to Tk 21.58 trillion at the end of March, up from Tk 19.23 trillion a year earlier.

Savings deposits also posted healthy growth, rising to Tk 4.47 trillion from Tk 3.99 trillion over the same period. They accounted for 20.72 per cent of total deposits.

Special notice deposits (SNDs) increased to Tk 1.81 trillion from Tk 1.69 trillion a year earlier.

However, bankers expect the pace of growth in fixed deposits to moderate following Bangladesh Bank’s decision to cap the weighted average spread between lending and deposit rates at 4 percentage points for all sectors except credit cards and consumer finance. The directive took effect on June 29.

Market participants said the ceiling could limit banks’ ability to offer higher deposit rates, as they will have less room to offset increased funding costs through lending rates.

Mutual Trust Bank Managing Director and Chief Executive Officer Syed Mahbubur Rahman said attractive interest rates had been the key driver behind the strong growth in term deposits.

“People are increasingly opting for fixed deposits as they are receiving better returns on their savings.”

He said overall deposits had grown by more than 10 per cent, reflecting improving depositor confidence, while fixed deposits remained an attractive investment because of their assured returns.

Policy Exchange Bangladesh Chairman and Chief Executive Officer Dr Masrur Reaz said the surge in term deposits reflected savers’ preference for safer investment options amid persistent inflation and economic uncertainty.

He cautioned, however, that the trend could weaken under the new interest rate spread cap.

“Banks are now likely to face greater pressure in balancing lending and deposit rates. If they reduce deposit rates to comply with the spread ceiling, the incentive for savers to keep money in term deposits could weaken.”