Inflation Is Eating Out Profits From Bank Deposits In Poland
According to the data published by the Open Finance, bank deposits or lokaty are not as profitable as anyone would have thought. Most of the Poles think that when they invest in any type of bank deposits, they are going to be making profits. The truth is much different. What truth tells us is that we should not be lazy when we invest in bank deposits. We should treat bank deposits just as any other investments with caution and lots of information at hand.
Data tells us few things about these bank deposits. First, only a small chunk of bank deposits or lokaty are bringing any type of the returns. We are talking here about a return in any percentage. Most of the bank deposits are bringing losses. You may wonder: how could this be when the banks advertise that they are bringing in profits of 2.0% or any other number? Are they lying?? The short answer is no, but just as with any type of the answer there follows an explanation.
Image via Wikipedia
The reason why we don’t see much of returns on these financial products is because there is something that we also need to take a look at and that is inflation. When inflation goes up, returns on any investments need to go up in order for them to be profitable. If inflation is higher than the return on bank deposits that means that you are experiencing loses and you should not invest your money in it. If returns are higher than the increase in inflation, that basically means that you made profit. Based on that information only smaller half of banks have returns higher than the inflation on their deposits. That is the reason why there are much better options available to invest your money in intead of bank deposits.
Related articles
- Interest Rate on Saving Bank Deposits in India-Banks can decide. (simplybanking.wordpress.com)
- Banks Really Do Have Too Much Money (lezgetreal.com)
- Banks Have Too Much Money! (outsidethebeltway.com)
Related posts:
