FRANKFURT: German savers are getting cold feet about deposits held abroad despite juicier interest rates for fear of getting embroiled in a crisis like the one that hit Silicon Valley Bank, data compiled for Reuters shows.

German households, who have Europe’s deepest pockets with 2 trillion euros held in cash, had been seeking higher returns on their cash by opening deposits online at small banks in weaker economies such as Lithuania, Malta, Italy and Portugal.

But that trend turned suddenly on March 10, when the collapse of Silicon Valley Bank sparked turmoil in the banking sector, according to data provided by two German comparison websites.

Demand for foreign deposits with a fixed maturity dropped by 15%-20% since March 10 compared to February, according to data from online platforms Check24 and Biallo, which work with banks to market these and other products.

By contrast, German banks, which are perceived as safer because of their government’s high credit rating and two separate safety nets on deposits, saw an increase in demand, both platforms said.

Germans’ retreat to safer ground mimics, on a small scale, the exodus of U.S. depositors from small to large banks in the wake of SVB’s collapse and could raise funding costs for lenders in weaker European economies that were hoping to tap Germany’s vast pool of cash.

“Investor sentiment changed after March 10,” Moritz Felde, a managing director at Check 24, told Reuters. “I see an increase in demand for banks located in triple-A countries.”

A spokesman for Biallo said queries about deposit insurance schemes quadrupled since March 10 on its platform.

Sibylle Miller-Trach of the German consumer association in Bavaria said “term deposits aren’t necessarily safe” and savers should gather information about the creditworthiness of the bank and its country.

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Check24 and competing platforms do not publish figures about their volumes of business so it is hard to tell how much money Germans have deposited abroad.

But if foreign banks had secured just 10% of the 83 billion euros that Germans poured into domestic term deposits in the past six months, missing out on that kind of money in the future would be significant for smaller banks on the receiving end.

Small Italian investment bank Smart Bank was paying the highest rate on a 12-month deposit on Thursday at 3.5%, followed by Malta’s Izola Banka and Croatia’s Banka Kovanika at 3.45%, according to the latest offers on major German comparison platforms.

By contrast, the most that savers could get from a German bank was 2.55% from online lender SWK Bank.

While rates on term deposits have generally gone up over the past month, the increase has been more pronounced for foreign banks, a Biallo spokesperson said, adding the platform expected this spread to widen further.

“The current crisis is leading customers to keep their deposits with their local bank,” said Christian van Beek, a director at the Scope Ratings agency.

Known in German as Festgeld, term deposits pay savers interest for locking in money at a bank for a number of months or years and had been a staple for Germans until a collapse in rates a decade ago made them unappealing.

With rates rising again as part of the European Central Bank’s fight against inflation, German households have been rekindling their long-lost love for Festgeld since September, ECB data showed.

The euro zone banking system is still awash with the cash pumped by the ECB over the past decade, which the central bank is only withdrawing at a moderate pace.

The ECB also remains on tap to provide banks with unlimited liquidity for as long as they have collateral.

“Behind the system there are strong states and a strong central bank,” said Daniel Bauer, chair of the German association for investor protection. “I don’t see any cause for concern here, as long as you look at the limits of deposit insurance.”