Cypriot depositors have significantly changed how they manage their money in recent years as shifting interest rates have influenced where households and businesses keep their savings.
The choices made by the two groups reveal different strategies. Households favour instant-access accounts for their everyday finances, while when they choose to save for longer they favour term deposits of more than two years in search of higher returns.
Businesses, by contrast, favour greater flexibility and shorter commitments, placing surplus funds in deposits of up to one year to earn interest without tying up their liquidity for long periods.
Data from the Central Bank of Cyprus’s statistical economic bulletin show that €59.336 billion was held in Cypriot banks in August 2026.
A breakdown of the figures in Tables 1.1 and 1.4 shows where that money was held and who owned it.
Where the €59.3 billion is held
Instant-access deposits – €52.287 billion: Households and businesses keep 88.1% of total deposits readily accessible, giving them immediate liquidity for everyday transactions.
Deposits with an agreed maturity – €6.430 billion: These are funds placed in term deposits. Household and business strategies differ, with households favouring longer-term savings of more than two years, while companies are more prominent in shorter-term deposits of up to one year.
Notice deposits – €619.3 million: These accounts have no fixed maturity date but require customers to give their bank notice before withdrawing their money.
Who owns the deposits
Households: €34.233 billion.
Non-financial corporations: €15.250 billion.
Other financial institutions and insurers: €7.345 billion.
General government: €2.507 billion.
The figures show how the money held in Cyprus is divided between households, companies, financial organisations and government, as well as between funds that can be accessed immediately and those placed in term deposits.
What are M1 and M2?
The Central Bank of Cyprus and the European Central Bank use monetary aggregates including M1 and M2 to classify money according to its liquidity – essentially, how readily it can be spent.
M1 covers the most readily available money. It includes currency in circulation and money held in accounts that can be accessed immediately.
M2 is a broader measure. It includes M1 as well as other deposits, including term deposits with maturities of up to two years.
The figures show that Cyprus’s M2 money supply increased by 17.2% over roughly three and a half years.
Money moved out of instant-access accounts
The amount of immediately available money measured by M1 fluctuated considerably between 2023 and 2026.
In April 2023, M1 stood at €34.273 billion. By February 2024, it had fallen to €32.362 billion.
The decline coincided with a period when instant-access accounts offered little or no interest, while higher rates made interest-bearing deposits more attractive.
From mid-2024, the trend reversed. By August 2026, M1 had climbed to €37.739 billion, its highest level over the period covered.
M2 followed a different trajectory, rising throughout the period.
It stood at €47.216 billion in April 2023, passed €51 billion in December 2024, reaching €51.185 billion, and rose to €55.364 billion by August 2026.
More than €8 billion was therefore added to M2 over the period.
€3.46 billion in cash
Physical currency in circulation – banknotes and coins – stood at €3.456 billion in August 2026, according to Central Bank of Cyprus figures.
The amount has increased steadily despite the expansion of electronic and mobile payments:
- April 2023: €3.232 billion
- December 2024: €3.388 billion
- August 2026: €3.456 billion
The figures show that the amount of physical cash in circulation continued to rise over the period.
How interest rates shifted the money
Changes in deposit rates coincided with shifts in where depositors kept their money.
In April 2023, the interest rate offered to households on deposits of up to one year stood at just 0.41%.
By December 2024, it had risen to 1.79%, increasing the incentive to move money into interest-bearing term deposits.
With the European Central Bank subsequently cutting rates again, the equivalent Cypriot term-deposit rate fell to 1.35%.
As returns declined, the figures show money moving back towards immediately accessible accounts, with M1 rising sharply in 2026.
