Increasing losses on deposit investments: HRE Investments

Even more than 10 percent of the real loss – such results may be achieved by some bank deposits that are at the end of the year. Deposits have not given such bad results for at least 17 years. Inflation is to blame for everything and the fact that banks do not pamper their savers.

This double-digit inflation is a blow to the purchasing power of savings. By entrusting them to banks, today we have almost a guarantee that in a year we will be able to buy significantly less with our money than today, despite charging modest interest.

"Let's be honest – we have been dealing with an interest rate that cannot cope with inflation for years. In the last dozen or so years, however, the situation has never been so bad. There have been periods when the real interest rate on an average deposit was at the level of minus 1 percent. When it was particularly bad, we reached the level of minus 2 percent. However, when the level of real losses exceeded 3-4 percent, it could already be said that the situation is particularly bad. Today, however, the real prospects are losses exceeding even 10 percent on a scale year," Bartosz Turek, chief analyst at HRE Investments, said.

The money that we entrusted to banks last year as part of the annual deposit can lose as much in value. It is no wonder then that some compatriots are looking for solutions that would allow them to maintain the purchasing power of savings.

So if someone established an average annual deposit at the beginning of 2016 and consistently renews it every year and plans to continue doing so, so far they would actually lose about 12-13 percent, and within 8 years (2016-2024) their real savings may lose as much as 22 percent from its original purchasing power. This is despite adding interest to the money. This is the best explanation for why many compatriots have preferred, for example, to buy retail treasury bonds, real estate, or gold in recent years.

(WBJ)