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Savers could be seen queuing at cash machines amid resentment at the charge.
The deal reached with euro partners and the IMF marks a radical departure from previous international aid packages.
President Nicos Anastasiades defended it as a “painful” step, taken to avoid a disorderly bankruptcy.
The Cypriot leader, who was elected last month on a promise to tackle the country’s debt crisis, will address the nation on Sunday.
While Cyprus may be one of the eurozone’s tiniest economies – its third smallest – there could be serious repercussions for other financially over-stretched economies, such as those of Spain and Italy.
The point of the levy is as a caution to lenders to banks that they should take care where they place their funds, and avoid banks that overstretch themselves – as Cypriot banks apparently did
Cyprus is the fifth country after Greece, the Republic of Ireland, Portugal and Spain to turn to the eurozone for financial help during the region’s debt crisis.
It appears that the heavy presence of Russian money in Cypriot banks was a factor in imposing the levy.
People in Cyprus with less than 100,000 euros in their accounts will have to pay a one-time tax of 6.75%, Eurozone officials said.
Those with greater sums will lose 9.9%.
Depositors will be compensated with the equivalent amount in shares in their banks.
Reports suggest that depositors will be able to access all of their money except the amount set by the levy.
The levy itself will not take effect until Tuesday, following a public holiday, but action is being taken to control electronic money transfers over the weekend.
Co-operative banks, the only ones open in Cyprus on Saturday, closed after people started queuing to withdraw their money.
At one bank in the Limassol district, a frustrated man parked his bulldozer outside and threatened to break in.
Alan, a British expatriate saver in Cyprus, told BBC News: “This is robbery and we must get the EU to stop this.
“We retire and bring our savings to a bank in Cyprus and they can just take our money away without permission and then say we have shares in a bankrupt bank.”
Maria Zembyla, from Nicosia, said the levy would make a “big dent” in her family’s savings and “erode the investor confidence”.
“Russians that currently keep the economy afloat will leave the country along with their money,” she added.
According to Reuters news agency, almost half of the depositors in Cyprus are believed to be non-resident Russians.
There has also been speculation that Russia could help finance the bailout by extending a 2.5bn-euro loan already made to Cyprus.
The new rule of the eurozone is that you can confiscate 10% from investors without hesitating”
Cyprus Finance Minister Michael Sarris will travel to Moscow for meetings on Monday, reports say.
“My understanding is that the Russian government is ready to make a contribution with an extension of the loan and a reduction of the interest rate,” said the EU’s top economic official, Olli Rehn.
Some Russian-language bloggers reacted angrily to the news of the levy.
“At first, I could not believe this possible in a civilised country,” wrote one on Twitter.
Another commented: “Cyprus is cruelly punishing private investors. The new rule of the eurozone is that you can confiscate 10% from investors without hesitating.”
In Berlin, German Finance Minister Wolfgang Schaeuble called the levy part of the “fair” distribution of the bailout’s burden.
“Profit expectations and risk have to coincide again, this gap [between the two] was one of the grave mistakes of the financial bailout [in 2008], and we have learned the lesson,” he said.
Oh boy. There are STILL people in Britain who think we should stay in the EU? I’m led to believe that President Obama is also keen that we stay in the European Union. I’m so sorry to say this as I quite like the chap, but if that is true he is a dick. If it isn’t true then I will carry on liking him.
Mad as bloody hatters the lot of them….
God Save The Queen and my pension
Thanks to the BBC for story contributions.