Cuban Savers Lose on Devalued Bank Deposit Certificates
while the banks keep the Dollars
The CDs emerged during the reforms launched by the government in January 2021, with the goal of revitalizing the struggling local economy.
By Amado Viera
HAVANA TIMES – Four years after the government forced them to transfer their savings to Certificates of Deposit (CDs), thousands of Cubans are unsure if they will ever be able to access their money again.
“My biggest concern is seeing the silence around the issue. I’ve investigated through all possible channels, and no one gives me an answer about whether they will ever return the money deposited in the certificates. The poor bank workers couldn’t be more lost,” said one of the affected individuals in an interview with Havana Times.
Due to his complaints, he was even expelled from the Metropolitan Bank’s Telegram social media channel in early 2024. He had asked if the lack of information was due to an order from the then Minister of Economy and Planning, Alejandro Gil Fernández. “And look at how Gil ended up,” he sarcastically commented, referring to the disgraced dismissal of that official just weeks later.
More recently, in January, the government announced a “partial dollarization” program, which again triggered alarms among CD holders. Some fear that this measure will lead to a further devaluation of the CUP (Cuban peso, the official currency) and the MLC, the digital currency in which the certificates are quoted. Savers could see the value of their deposits plummet without being able to withdraw or even transfer them.
A Bank Freeze Cuban Style
The CDs emerged during the “Tarea Ordenamiento”, a set of reforms launched by the government in January 2021 with the goal of revitalizing the struggling local economy. The plan involved devaluing the CUP against foreign currencies and eliminating the CUC, a currency created to replace the dollar in hotel transactions and various stores.
The CUC was also used to convert dollar payments and other foreign currencies received by Cuban professionals contracted abroad, some international awards given to athletes and artists, and much of the foreign currency deposits made by ordinary citizens.
“Nobody complained because before the January 2021 reforms, the CUC was on par with the dollar, and the bank guaranteed its value. Moreover, those types of accounts allowed for the withdrawal of accumulated money in cash or transferring it to others at any time. Not to mention, they offered much higher interest rates than deposit certificates,” recalled Aldo, a doctor who, in 2019, after returning from a four-year mission in Africa, had saved $5,000 dollars in a bank on the island.
The economic reform dramatically altered that reality. To eliminate the CUC without major issues, the government needed to have an equivalent amount of dollars in its banks, but that wasn’t the case. Despite the authorities’ claims, many more CUCs had been issued than could be backed up.
As a solution, the Central Bank decided to shift the problem to the savers. During the first months of 2021, they had to choose between two options: either exchange their CUC deposits for Cuban pesos (to withdraw or transfer to new accounts) or sign the aforementioned certificates. The first option involved exchanging at a rate much lower than the actual value: at that time, it was set at one CUC for every 24 pesos, and currently, it is 1×120. Meanwhile, on the informal market the only place where dollars are sold, the dollar has been above 300 CUP for over a year and has even surpassed 400 on several occasions.
For those who chose the CDs, the agreement was based on the banks’ commitment to return the amount deposited in dollars or euros as soon as “liquidity backing” was available.
The “trap” lies in the fine print of those contracts, which do not specify concrete timelines for returns. They also do not allow transferring accounts to others, except by inheritance, and set a meager interest rate of 0.15 percent annually.
“In other words, they kept our dollars and gave us a piece of paper saying they would return them someday. The version now circulating, that the certificates had been signed with a minimum term of five years, is a lie. My certificate was one of the first, and it doesn’t mention anything like that. It’s just an attempt to rewrite what was agreed, something that in any country in the world would be a crime,” lamented Aldo.
Like other CD holders, he tries not to make public statements to independent press. “If they wanted to take retaliation, they could even block my account. And then, who do I complain to?” he explained.
Unprotected
Two years ago, when in August 2022 the exchange houses (Cadeca) resumed limited dollar sales to the public, many CD holders thought it opened a door for recovering their money. They reasoned that at least part of the foreign currency sold could be used to compensate them for the funds they had deposited.
But their reasoning had little to do with the Central Bank’s plans. The Cadeca sales were designed to collect part of the enormous amount of circulating cash, not to compensate savers.
The same disappointment awaited them with authorizations for new bank deposits in dollars and the sale of fuel and various services, also in US dollars, issued in April 2023 and March 2024, respectively.
“The conditions regarding foreign currency deposit certificates remain, and so far, only total or partial withdrawals in the devalued pesos are allowed, at the rate of 1×120,” warned statements from the Central Bank. Initially, the official rate—which is much lower than the one applied on the street—ensures that practically no saver will demand their money.
“No matter how you look at it, it’s nonsensical. What’s the point of having an account if you can’t touch even a dollar of the money deposited there?” criticized another affected individual, who, in late 2024, faced an absurd situation at a gas station on the National Highway.
He was almost unable to refuel because only international credit cards (like Visa or MasterCard) or new dollar debit cards created by the Cuban Central Bank were accepted. “I had no way to pay. My other cards were useless, and the dollars I have in a deposit certificate didn’t help. Now, they only want ‘fresh’ money,” he denounced.
A good option would have been for CD holders to request the new cards by transferring part of their balance from their accounts. But it doesn’t seem like the banking authorities are considering this possibility. And the affected individuals have no way to complain to them.