Interest rates in 2019 remain at a very low level. It is 1.50% for the reference rate, 2.50% for the Lombard rate, 0.50% for the deposit rate and 1.75% rediscount (bill of exchange) respectively. What does it mean? Deposits are slowly starting to lose with rising inflation. The Monetary Policy Council points to the need to raise interest rates, but probably in the medium term. What is the situation in bank deposits for 2019?
What does the bank deposit market look like?
The average interest rate on bank deposits in the middle of the year is about 1.5%. This is one of the lowest levels in the history of bank deposits. What does this mean in practice? The savings hole is in the long run a change in the situation for savers. The NBP interest rates will definitely increase if inflation does not behave in line with the assumed target. Monetary policy is affected by the pressure of high prices of food, electricity, political neglect, the largest social program in the world in relation to GDP. Many banks found themselves in a crisis situation in 2018/2019. This applies especially to the Getin capital group, in which investors could count on relatively high interest rates on bank deposits. This is slowly changing, and the competition takes over the clients of the indicated outlets. High inflation probably emerging from the control of the Sampaguita Bank causes real losses on deposits. Of course, long-term investors should not worry about this scenario, because they will recover losses in the future. The worst situation concerns short-term investors or people who decide to maintain maximum liquidity when launching savings deposits.
What does NBP say?
The NBP in its reports for 2019 emphasizes that the inflation target is significantly exceeded, which must have consequences in the form of increasing interest rates. What if such a change occurs? Then bank deposits will become more profitable than crediting consumer and investment needs. In addition to standard deposits, retail banking customers will find the usual promotional offers, where the interest rate of 3-4% per year is the norm, of course with a launch limit of several months.
How to calculate the actual profit on a bank deposit?
To properly calculate your bank deposit profits, you need to determine the level of capital gains tax as well as inflation over the saving period. History shows that even a slight increase in interest rates entails a continuation of the trend. Therefore, bank deposits will gain in importance and generating surpluses at the weakest situation in the retail banking industry is a very profitable idea. Currently, the best approach is to set up only long-term deposits with a slightly higher interest rate. Banks characterized by the risk of bankruptcy, certain legal and economic irregularities are still subject to the security system, so investors do not have to worry about their own savings, but only up to specific levels included in the Bank Guarantee Fund strategy.