Despite falling inflation, bank deposits continue to generate losses

Falling inflation causes real interest rates on deposits to rise. However, most deposit holders still lose money. The holder of an average annual deposit completed in July 2023 lost about 5,5% in real terms. 72% have bank deposits. Polish investors.

Deposit holders are always at a loss

Inflation in July, according to preliminary data GUS, amounted to 10,8 percent. y/y Since its peak in February this year, it has fallen by 7,6 points. percent Along with the progressive decrease in inflation, with the interest rates at a constant level, the losses of bank deposit holders decrease. Still, holders of bank deposits lose heavily.

Owners of annual deposits ending in July 2023 lost an average of 5,51 percent on them. This is due to the fact that the average interest rate on new annual deposits, according to the data NBP, in August 2022 it amounted to 5,8 percent. With inflation at 10,8%, the real interest rate was -4,54%. If we also take into account the need to pay 19 percent interest tax, the real interest rate on such a deposit is -5,51 percent.

Source: eToro

The losses of holders of bank deposits have recently decreased significantly, because in March this year the loss was in double digits and amounted to 11,7 percent. In September 2022, losses were record-breaking - holders of deposits ending this month lost 14,51 percent. In the near future, the losses of deposit holders will decrease, precisely due to the melting inflation, with the annual best deposits remaining at the level of 6-7 percent. annually. After the holidays, however, one can expect a decline in interest rates on deposits due to the upcoming interest rate cuts by the National Bank of Poland.

3/4 of Poles keep funds on deposits

Bank deposits remain part of the portfolio of many investors. According to the latest study eToro 72% of Puls Investors have cash or bank deposits. Polish investors. Poles do not differ from investors from other markets in this respect - 74% of investors decided to buy such products. global investors.