Ukrainians should review their savings strategy ahead of winter — Mamedov

As winter approaches, bringing additional war-related and energy risks on top of the usual economic uncertainty, Ukrainians should pay closer attention to their savings and avoid leaving their available funds idle. An optimal strategy should combine several instruments — hryvnia deposits, domestic government bonds and foreign currency. The proportion allocated to each will depend on an individual's financial goals, future expenses and risk tolerance.

This was stated by Serhii Mamedov, Vice President of the Association of Ukrainian Banks and Chairperson of the Management Board of GLOBUS BANK, who took part in a podcast hosted by financial expert Oleksii Kozyrev as part of his series.

According to the banker, waiting for the “perfect moment” to invest funds often results in lost potential income. The deposit market already offers interest rates of 17–17.5% per annum, although the specific terms vary considerably depending on the bank and the deposit maturity.

He pointed out that keeping all savings exclusively in foreign currency is not a universal way to protect capital either, since inflation is not limited to Ukraine — the purchasing power of the US dollar and the euro also changes over time.

“My recommendation is simple: money should work. First, this prevents your capital from losing its value. Second, it helps rebuild and develop our country. Money that is “hidden away” somewhere does not contribute to the economy,” Serhii Mamedov emphasised.

How to protect your savings

According to him, there is no universal formula for allocating savings: it should depend on financial goals, the amount of capital, regular expenses and an individual's risk tolerance.

At the same time, as one possible approach, the banker outlined an illustrative model in which around half of one's funds could be allocated to hryvnia-denominated instruments, with the remainder divided between foreign currencies.

Foreign currencies should also be selected in line with future expenses. For example, if someone travels regularly or has expenses in eurozone countries, it makes sense to keep part of their savings in euros to avoid losing money on additional currency conversions.

The banker also recommends diversifying the hryvnia portion of savings, especially when dealing with substantial amounts, across several instruments — deposits and domestic government bonds. When choosing government bonds, he says, it is important to take into account any bank or brokerage fees, as well as account maintenance costs.

At the same time, he stressed that this model should not be automatically applied to every depositor: the structure of savings should be tailored to each individual.

Foreign exchange market

Commenting on the situation in the foreign exchange market, Serhii Mamedov said he sees no grounds for panic-driven demand. In his assessment, the available volume of foreign exchange reserves and international assistance gives the NBU sufficient capacity to keep the market under control.

Briefly addressing the possible exchange rate towards the end of the year, the banker suggested that a move towards approximately UAH 45 per US dollar was realistic. However, given the war, the volume of international assistance and budgetary needs, any precise forecasts remain conditional.

At the same time, in his view, for someone buying foreign currency as part of their savings strategy, it is more important to determine the appropriate share of foreign currency in their portfolio than to try to predict the best exchange rate.

Financial monitoring: being able to demonstrate the source of funds

Serhii Mamedov also addressed financial monitoring, emphasising that a bank's review of certain transactions does not automatically mean that a customer will be blocked or treated with prejudice.

According to him, modern financial monitoring systems are largely automated: specialised algorithms analyse large volumes of banking transactions and primarily flag unusual financial behaviour. For example, a substantial incoming payment followed by transfers to a large number of cards may attract attention, as may other transactions that differ significantly from the usual pattern of account activity.

“There are automated algorithms that analyse the entire volume of transactions processed by a bank. If any inconsistencies are identified, the transaction is referred for more in-depth review,” the banker explained.

In such cases, the bank may contact the customer and ask them to explain the economic purpose of the transaction or provide documents confirming the source of the funds.

Serhii Mamedov emphasised that if questions arise about a transaction or account, the best approach is not to ignore the bank's request, but to contact the institution as soon as possible through customer support, the mobile app or other official channels and provide the necessary information.

In the banker's view, as Ukraine integrates into the European financial system, requirements for transparency regarding the origin of funds will become increasingly important. Therefore, for anyone saving, investing or carrying out substantial financial transactions, the ability to confirm the source of their income is becoming just as important as choosing the right financial instrument.

“You should always think about how you will explain where the money you intend to invest came from. This may include documentary evidence of income from the sale of assets, deposits held with banks, a tax return or salary payments received. Requirements concerning the source of funds will only become stricter in the future,” Serhii Mamedov concluded.