Spaniards accumulate greater than a billion euros trapped in unpaid accounts | Economy | EUROtoday

“I don’t invest for fear of losing more money than I have, although I know that if it sits still it loses value. I worry because prices rise and the amount of money in the bank remains the same.” Iratxe, 30, summarizes in two sentences a dilemma that thousands and thousands of Spaniards face: the concern of investing within the face of the understanding that leaving cash in an account means shedding buying energy. Iratxe has by no means invested, however he worries about find out how to handle his financial savings and his monetary scenario. “I have sometimes thought about investing, but I don’t have enough knowledge, I prefer to move towards low-risk products, such as remunerated accounts. In the end, from the bank you have control of the money, it is the easiest.”

This silent loss is assumed by a majority of residents who select to go away their financial savings within the checking account. In whole, Spanish households accumulate a couple of trillion euros in deposits (together with demand accounts and time deposits) that yield virtually nothing, and every single day they lose buying energy because of the impact of inflation. The common remuneration of demand deposits in Spain is round 0.14% yearly, and that of time deposits is 1.6%, based on statistics provided by the European Central Bank (ECB). Very low figures in comparison with inflation, which in December stood at 2.9%. Even so, and based on knowledge from the Bank of Spain, households have 1.08 billion sleeping on these ultra-conservative merchandise on the finish of 2025.

“It’s of little use to save like before. I’ve thought about investing, but I don’t have financial education and I’m afraid of losing money, you have to be well informed. If there was a sure product that would give me some profitability, I would hire it, but I’m afraid because I don’t understand it.” Pilar is 57 years previous and has by no means contracted funding funds or bonds. Throughout his life he has opted for conventional financial savings, trusting that cash within the financial institution was synonymous with safety, though as we speak he’s conscious that this safety has a value.

To perceive it with a concrete instance: if a saver retains 50,000 euros in a checking account that provides him nothing and inflation is 3%, he loses about 1,500 euros of buying energy in a yr. You will not see these 1,500 euros disappear out of your account, however it is possible for you to to purchase items for about 48,500 euros in actual phrases. Your cash is price much less, so to talk. If the steadiness had been larger, the blow could be much more evident: with 100,000 euros immobilized, the actual loss would quantity to three,000 euros per yr.

“The first, and most obvious, risk is the continued loss of purchasing power derived from maintaining large amounts of unpaid savings in a context of positive inflation of 3%. The second is the risk of being directed towards inappropriate products due to the commercial pressure of the entities, especially when the most profitable products for the bank are not always the most suitable for the client. Finally, there is the risk of excessive concentration in liquidity, which reduces the ability to obtain profitability and limits the diversification of assets in the medium and long term,” he explains. Rafael Pampillón, advisor to the College of Economists of Madrid.

The approach to not lose cash is to realize a return that no less than equals inflation. But Spain is a paradigmatic case of danger aversion. Savings are channeled primarily into accounts and deposits, and to a lesser extent in the direction of funding merchandise. According to statistics provided by the sector affiliation Inverco, the property in funding funds are round 500,000 million euros, lower than half of what’s accrued in accounts. And that quantity is conditioned by the robust will increase within the markets in recent times. In the occasion of a correction within the inventory markets, such because the one which occurred in April of final yr after Trump’s tariff plan, that determine would fall significantly.

“For many households, a deposit without remuneration continues to be more attractive than an investment with profitability, especially when they perceive that the investment involves risk. There is also a lack of financial education. Numerous studies show that a large part of the population does not properly evaluate the impact of inflation, nor compare alternatives to the conservative savings that 0% interest rate deposits entail. It is not so much that the Spanish saver wants to lose money, it is that they do not always understand that they are losing it,” assesses Pampillón.

“We continue to surprise each other in a negative way. Everything indicated that the saver would become an investor because he is aware of inflation and the markets have worked well. There is still a lot of liquidity and it is an anomaly of our financial system. To beat inflation you have to take risk. The recommendation is to have 30% exposure to the stock market. There are mixed funds that can have between 25% and 30% of variable income. A monetary fund is no longer an option because it will give 1.5%,” provides David Cano, companion at Analistas Financieros Internacionales (Afi) and director of its administration firm.

A typical concern in Europe

At the European degree, the issue is comparable. The European Commission has been warning for years {that a} substantial a part of residents’ financial savings stays in low-paying deposits, as a substitute of being channeled into the capital markets. According to calculations, Europeans have 10 trillion euros, almost 40% of their monetary property in unpaid accounts and deposits. To attempt to right this imbalance, Brussels has promoted the creation of Savings and Investment Accounts (SIA), an instrument designed to make it simpler for small savers to spend money on a easy means and with clear guidelines.

Spain has lately taken the primary steps to launch this automobile. The Ministry of Economy has opened a public session to outline the rules of those financial savings accounts, which might enable totally different monetary merchandise, resembling shares, bonds or funding funds, to be grouped below a typical framework, with predictable prices and simplified operations for the retail investor. The European Commission recommends that these accounts have tax incentives, though this side has but to be specified within the closing design adopted by every Member State.

The goal is to supply residents a substitute for immobilized financial savings that’s simple to know and function. Currently, the contracting, and paying taxes, of a share, a fund and a deposit are totally different, a complexity that deters some savers. The plan, on the identical time, goals to mobilize a part of these sources in the direction of financing the European economic system. However, even when the initiative strikes ahead, its success will depend upon savers feeling comfy taking that closing step in the direction of funding.

Beyond this proposal, specialists take into account that the banks themselves ought to provide different sorts of merchandise aligned with the profile of Spanish savers. “The entities themselves should recover a basic offer of simple and conservative products for those who do not want to take on too much risk with volatility in the value of their assets. Banks should also make a greater effort to explain the real impact of inflation on balances in accounts at a 0% interest rate and help the client move towards low-risk products when their profile allows it. The objective is not to push the client, but to guide them,” highlights Pampillón.

Furthermore, monetary training continues to be a pending problem. Although the speed enhance carried out by the ECB in 2022 revived curiosity in financial savings and funding merchandise as a result of deposits, which had disappeared for years, returned to banking home windows, many voters nonetheless don’t totally perceive primary ideas resembling inflation, actual profitability, assumed danger or APR. They additionally have no idea the totally different merchandise that exist in the marketplace to make their financial savings worthwhile or the danger that every of them has, which has generated a cocktail that retains a billion euros sleeping in accounts and demand deposits with out remuneration, shedding worth every single day.