The Riksbank's right to demand interest-free deposits (deposit requirement)

The Riksbank’s financial liabilities mostly consist of the banking system’s claims in Swedish krona on the Riksbank. These liabilities are mainly a result of the Riksbank borrowing Swedish kronor from the banking system to finance its Swedish and foreign securities. The loans are made by the Riksbank offering its monetary policy counterparties the opportunity to place funds in an account at the Riksbank overnight, in a standing deposit facility. We also offer them the opportunity to buy Riksbank Certificates with a one-week maturity. In both cases, the Riksbank pays interest on the placements.

The deposit requirement means that monetary policy counterparties and other banks and credit institutions do not receive any interest when they place funds at the Riksbank. This reduces the Riksbank's interest costs and thus contributes to improved earnings.

Interest-free deposits and the Riksbank's financial independence

The basis for the Riksbank's financial independence is that it has access to cost-free capital, such as banknotes and coins and equity, which is then invested in interest-bearing assets. The return on these assets is intended to cover the bank's administrative costs.

In Sweden, cash is used to a lesser extent than in many other countries, which limits this source of funding and means that the Riksbank needs to fund its assets in other ways instead. As a rule, this funding entails an interest cost, which weakens the Riksbank's earning capacity. Interest-free deposits provide the Riksbank with an alternative source of funding that is independent of the use of cash.

According to the Sveriges Riksbank Act, the Riksbank may decide on interest-free deposits if the Riksbank's equity falls below the so-called target level. For 2025, according to the Riksbank's annual report, equity amounts to SEK 23.0 billion, and the target level to SEK 63.1 billion. The maximum amount of the interest-free deposits is updated every year, after the Riksdag has adopted the Riksbank's profit and loss statement and balance sheet. As the Riksbank makes profits and builds up its equity, both the need and the scope for interest-free deposits will decrease.

Riksbank can require interest-free deposits from credit institutions in Sweden

If the Riksbank decides on interest-free deposits, this means that all credit institutions operating in Sweden will have deposits at the Riksbank without receiving interest. This applies to both Swedish credit institutions, such as banks, and branches of foreign credit institutions. Each institution will be allocated an account at the Riksbank where the interest-free deposits will be held.

Size of credit institutions' deposits

The amount of deposits each credit institution must have in its account at the Riksbank without receiving interest depends on its so-called deposit base. A credit institution's deposit base consists of its deposits and issued debt securities, with some exceptions. All credit institutions must hold a certain proportion of their deposit base as interest-free deposits at the Riksbank. Deposits will thus be proportional to the size of the institution, which means that the largest credit institutions in Sweden will contribute the most interest-free funding to the Riksbank. The amount of non-interest-bearing deposits to be held by each institution will be determined on the basis of the deposit base at each year-end.

How interest-free deposits work 

1. The Riksbank can require interest-free deposits from all credit institutions in Sweden.
2. The maximum deposit requirement is the difference between the Riksbank's equity and the statutory target level for equity.
3. The deposit requirement is distributed proportionally among all credit institutions.
4. Each institution's interest-free deposits are based on its deposit base, which is determined at the end of each year.

An annual process

The deposit requirement is determined through an annual process. The deposit base of each credit institution is calculated on the basis of its liabilities at the last year-end. The deposit base is then used to determine the amount of interest-free deposits an institution should hold in the coming period.

Once the Riksbank’s annual report has been published and the Riksdag has adopted the profit and loss account and balance sheet, the Riksbank can decide on the size of the interest-free deposits.

All credit institutions then pay the deposit requirement to their account at the Riksbank. The amount remains there until a new decision is taken the following year. If a credit institution’s deposit requirement decreases, the Riksbank will repay the excess amount. If the requirement increases instead, the institution must deposit additional funds in its account.

This is what happens in a year

1. The deposit base for the credit institutions is determined at the end of the year.
2. The Riksbank’s Annual Report is published.
3. The Riksdag (Swedish parliament) adopts the Riksbank's income statement and balance sheet
4. The Riksbank decides on the size of the deposit.
5. The credit institutions pay.
6. The deposits remain in place until a new amount is set next year.