Changes in their behavior depositors caused by the current situation, with war in Ukraine to limit exposure to risk.
While in the last two years the liquidity available for investment of individuals has flowed non-stop to mutual funds, at the expense of zero-yielding time deposits, in recent months, the investing public is more cautious.
At banks, they are seeing an increase in mutual fund buybacks – which signals lower fees for the banking sector than specific jobs – and explain this trend as a result of market psychology that prefers its liquidity locked up in a safer haven.
Term bonds – once the first choice of savers – have remained… unclaimed, since they do not offer the slightest yield. More or less, all banks give for a term, an interest rate of 0.02%- 0.03%, so in essence they only provide security.
Perhaps after extensive market research, someone will find multiple returns, however, in a non-systemic bank.
Theoretically, from September there will be upward revision movements in forward interest rates as well, as an inevitable consequence of the general increase in interest rates, but to a much lesser extent compared to the increase in loan interest rates.
The saving public is sure to welcome such a move, even if it is a third of the rise in interest rates on loans. Futures are absolutely safe, guaranteed by the system for up to 100,000 euros and without any risk. If today’s 0.03%, which is the maximum yield in the four systemic groups, follows an upward path, it will surely find new depositors to accompany it.
What is invested in Mutual and what in futures – What is the trend
Very often the numbers speak for themselves. In July, net inflows to Mutual Funds amounted to 48 million euros and in the May-July quarter, they recorded a decrease of 5 million euros.
The uncertainty that has prevailed since the beginning of the war in Ukraine until now has, as expected, changed the investment behavior of households and individuals, who are reconsidering including time deposits in their investments.
In these, the reduction is still the main characteristic, but it also reflects elements of de-escalation. That is, from February onwards, until the end of July, the outflows from the area of time deposits were restrained. On average, net outflows were during this period at 335 million euros, when in the period March 2021 – January 2022, the average monthly outflow was three times more, at 900 million euros.
In July, for which the latest figures are also available, the reduction in forwards was by 248 million euros, i.e. clearly more controlled. In the four months of April – July, they decreased by an average of 287 million euros per month.
Obviously, the reduction in term deposits has also started to reach its limits. It is possible that before the end of the year, the market will see a rebound in investor preferences. Something that upward, competitive pricing would help with.
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