Despite being a safe investment, the term money has ceased to be attractive to the Spanish saver. A situation that take advantage of funds and current accounts to gain presence.
‘Sometimes, you will have to leave your comfort zone to obtain significant profits’. This phrase by Robert Arnott reaches its full meaning at the present time.
And, being sure, the investment in bank deposits makes it increasingly difficult to save. With the 0% rates and the average return around 1.5%, is this the best option to invest the savings?
Undoubtedly not. Nor should forget the importance of saving for the future. The need for profitability, thinking about tomorrow or at the time of retirement, forces the saver to move.
And the truth is that he is already doing it. Specifically, saving less and less money at home and losing confidence in traditional bank deposits.
Four years fall in deposits
Spanish households continue to save 40% of their money in the form of deposits and cash. As shown in the “Financial Accounts of the Spanish Economy, September 2017”, prepared by the Bank of Spain.
However, during the past 2017, a good part of the capital invested went to participations and investment funds. Going from almost 769,000 million euros to more than 827,000 million in just one year.
This change in strategy reveals the loss of interest of the Spanish saver for those less profitable products.
Among them, term bank deposits that fell from 339,968 million (December 2015) to 278,922 million (Dec 2016). Or the cash, which went from 72,004 million (2015) to 67,965 million (2016).
The data of the Bank of Spain are resounding. Of the 790,000 million euros that Spanish families kept in banks at the end of 2016, 512,000 corresponded to current accounts. Against the aforementioned 278,000 in deposits.
Three quarters later, the money in the accounts has risen to 560,000 million. While that of deposits has fallen to 229,000 million.
The Spanish saver wants to win, not save
Undoubtedly, recent years have helped Spaniards to optimize savings and reduce debt.
With the wealth of families growing at a rate of 4.3%, households and non-profit institutions now have 1.332 billion euros (Sept 2017).
This amount, equivalent to 115.8% of the Gross Domestic Product (GDP), exceeds by 0.7 points the financial wealth available a year earlier.
Proving that the Spanish saver remains above pre-crisis levels. Leaving behind the volume of capital of early 2007, slightly less than a trillion euros.
And although the net financial wealth, with respect to the previous quarter, has fallen by 1.34%, the conclusion must go further.
Showing that households have taken advantage in recent years to heal their economy and increase wealth.
A portfolio with a lot of assets
Among the financial assets of households, cash and bank deposits recede (40% of the total).
Faced with the increase in shares, investment funds (14%) and capital (25%). Or the presence, insurance and pension funds (17%) and the rest of assets (4%).
In total, financial wealth in September 2017 reached 2,109 million euros. 2.8% more than a year before.
Due, especially, to the purchase of financial assets for 25,000 million euros and a revaluation of 31,000 million in the existing ones.
Investment alternatives for the Spanish saver
As opposed to the majority of banking products, or saving money in effect, real estate investment offers average returns of 5.5% to 8.4%.
Being one of the most attractive alternatives for the Spanish saver. From renting a home (7.3%) to a commercial store (8.4%) or an office (7.8%).
Few financial products can equal the purchase of real estate assets.
