site.btaHousehold Deposits in Bulgaria Rise Ahead of Eurozone Entry, Experts Say

Household deposits in Bulgaria grew by 12.2% year-on-year in July, above the usual 7–9% pace of recent years. According to credit consultant Tihomir Toshev, the increase is mainly driven by the upcoming eurozone accession on January 1, 2026. Many Bulgarians are moving “cash under the mattress” into banks so it can be automatically converted into euros.

The Association of Banks in Bulgaria (ABB) confirmed that stronger deposit growth is expected in late 2025 as people prepare for conversion, supported also by rising incomes. Average wages grew 12% in Q2 2025, outpacing inflation. However, savings remain unevenly distributed: 20% of deposit holders own 80% of funds, while most households keep under BGN 20,000. Small deposits are eroding as higher prices pressure low-income families.

Large deposits above BGN 200,000 now total BGN 16 billion, or 17.1% of all household deposits, up from BGN 10.9 billion (14.5%) in 2023. Overall household deposits exceed BGN 94 billion.

On borrowing, most consumer loans finance home improvements. Holiday loans have almost disappeared, with people preferring to use savings. The average consumer loan now exceeds BGN 15,000 due to higher renovation costs. Housing loans dominate, accounting for 57% of household lending, with 2025 expected to set a record due to eurozone-related demand.

Non-performing loans fell to 1.77% in mid-2025, close to the EU average and lower than in 2024. Mortgages are particularly stable, with defaults at just 0.41%. ABB stressed that the banking sector is well-capitalized and resilient.

Mortgage rates remain among the lowest in the EU at around 2.4% and are expected to stay between 2.2% and 2.8%. Deposit rates, however, will remain low (0–2.5%) given excess liquidity.

Alternative savings options, such as mutual funds and real estate, are gradually gaining popularity. Mutual funds yield 2–5% annually but carry risk, while real estate investments have brought high returns in recent years from both rents and property price growth. Toshev cautioned, however, that none of these options are risk-free and urged households to save and invest wisely.