A Comparative Study of Machine Learning Algorithms for Time Deposit Pricing

Time deposit pricing is one of the main business areas of a bank to increase its profitability. This pricing depends on lots of factors and it requires an advanced data processing to find the best interest rate in order to keep bank profitability and also customer satisfaction at the highest level. This study presents a customer-specific interest rate determination system for a bank’s time deposit products from Turkey. Lots of variables such as past interest rate and maturity period are considered as input data. New and custom features are also extracted using the data at hand within the scope of feature engineering to improve system’s performance. Different machine learning algorithms are used for interest rate prediction and their performance is compared. The experiments are realized using real bank data and this is one of the few customer-level studies in this working domain in the literature.