The course recently taken by the European Central Bank (ECB) to lower interest rates marks a new turnaround. Long-term savings deposits in particular are already less profitable than a few months ago; a trend that is expected to continue.
But savers in Austria are not deterred by this: just in time for World Savings Day on October 31, demand for savings products remains high.
After a long phase of zero interest rate policy, the ECB has tightened its monetary policy measures from 2022 to combat inflation. This made loans more expensive and savings products became more attractive again. However, the high interest rate policy came to an end a few months ago when the ECB relaxed its restrictive stance in light of falling inflation.
For savings products, this means that banks will gradually adjust interest rates, meaning that consumers must prepare for lower returns.
For savings products with a term of three years (36 months), a maximum interest rate of 2.95 percent is currently offered – less than at the beginning of the year (maximum 3.375 percent for office transactions).
BAWAG speaks of “robust” demand, Raiffeisen Stadtbank Wien and Volksbank Wien speak of “high” or “large” demand. Many consumers are currently still assured of offers with relatively higher interest rates. Oberbank has noted something similar, where there is currently a lot of demand for fixed-income products, i.e. investments with a fixed interest rate.
The monthly amount that Austrians can put aside has increased this year. Saving is a high priority among the population, and at the same time more and more people recognize the value of alternative forms of investment.
“Saving is now and will remain attractive in the future,” explains Franz Rudorfer, Director of the Federal Banking and Insurance Department of the Austrian Economic Chamber (WKÖ). Especially in uncertain times, the need for a financial buffer is great – even if interest rates are currently falling slightly.
Source: Krone
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