In the last 12 months, a new trend has consolidated in people who keep their money in the financial system. Of the two most used types of deposits, the savings —which, due to their high transaction nature, financial institutions are willing to remunerate very little— have grown at a faster rate than fixed-term deposits. For the latter, entities are willing to pay higher interest the longer people are willing to leave their money.
According to the Superintendency of Banking, Insurance and AFP (SBS), at the end of October, the total amount of savings deposits of individuals in the financial system grew at a rate of 15.9%; Meanwhile, the amount of time deposits increased at a rate of barely 2%. This situation is far from what happened last year in a similar period.
As of October 2023, the amount deposited in personal savings accounts fell 15% compared to the similar period of the previous year; In contrast, the volume of time deposits grew 48%.
Why do people prefer to leave their money in transactional accounts that pay little interest?
Factors
For Enrique Castellanos, professor at the Faculty of Economics at the Universidad del Pacífico, this situation would be due, among other factors, to the fact that, as interest rates on term deposits are falling, in line with the monetary policy rate , the term deposit product could be less attractive to people.
Castellanos doubts that this situation is due to an issue linked to political risk because he points out that, unlike other countries, in Peru a saver, be it a person or organization, regardless of the type of account in which they have saved, can use their money whenever. Of course, there is a penalty on the interest if a term has been agreed, but not on the capital.
For Walter Rojas, Central Business Manager of Caja Cusco, this greater growth in savings compared to time deposits responds to the fact that, in a context in which interest rates are falling, financial entities are promoting savings accounts under the strategy of providing its clients with the freedom to move their money at any time, as well as for entities to access liquidity at a lower price.
“What used to be paid for a savings account was 0.5% or less than 1%, now entities are paying up to 3% and 4% for these accounts,” he said.
In turn, Marco Ortiz, professor at the Department of Economics at the Universidad del Pacífico, explained that this greater growth in savings deposits would be associated with the withdrawal of AFP and CTS funds.
According to Ortiz, of these AFP/CTS withdrawals, a part has been consumed, another has been used to pay debts and a no less important part has been allocated to savings accounts. “Which would indicate that they would spend it soon,” he commented.
He added that term deposit rates fell in line with the BCR rate and inflation expectations, which caused people to prefer to keep their money in savings deposits, waiting for some offer or investment opportunity or spending it in the short term. .
“There is some monetary illusion, that is, people are guided more by the nominal rate than the real one. A few years ago they paid you between 8% and 9% on time deposits with high year-on-year inflation. Today, with inflation expectations at 2% and the policy rate expected to continue falling, they offer you between 5% and 6% in the term, but people see it as very low, even though the real rate is almost the same, and prefer liquidity,” he commented.
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