Savings lose to inflation for almost two years

Although official inflation measured by the IPCA (National Broad Consumer Price Index) registered a drop of 0.68% in July, Brazilians who keep some money deposited in their savings account have no reason to celebrate.

A survey by the financial data platform TC/Economatica indicates that, in the 12-month window ended in July, the real profitability of savings, that is, discounted by the variation of inflation, was negative by 3.52%.

The survey data show that the last time savings showed a positive return in the 12-month period was in August 2020, almost two years ago, therefore, when the real return was 0.45% within a year. .

“The allocation in savings makes no sense at this moment. The negative real income, added to the fact that the profitability depends on the monthly anniversary to be paid, makes this application very archaic, outdated and outdated”, says Bruno Mori, economist and planner financial with CFP certification.

He adds that those who put money into savings have a deep-rooted familiarity bias.

Professor of Economics at ESPM and CFP financial planner, Paula Sauer also says that, despite the wide range of fixed income products currently offered in Brazil, the savings account continues to be the “darling” of most Brazilians who start their journey in investments.

The most recent data from the BC (Central Bank) show that about 164 million people had some amount deposited in savings at the end of 2019.

“The customer who stopped consuming to save saw the purchasing power of their money decrease. This is very frustrating and discourages many to save money”, says the expert.

Also according to TC/Economatica data, those who invested R$1,000 in savings 12 months ago would have R$1,061.97 at the end of July. However, discounted by inflation of 10.07% in the period, the corresponding final return would be R$ 964.82.

“Imagine you stop consuming, discipline yourself to save money, and when you redeem it, you can buy less than before”, points out the ESPM teacher.

Savings earn less than half of the Selic

A study prepared by Anefac (National Association of Finance Executives) shows that, with the new high in the Selic rate carried out by the BC (Central Bank) on Wednesday (3), to 13.75% per year, while the main alternatives in fixed income offer more attractive yields, savings have the worst return among the options analyzed, even exempt from IR (Income Tax).

Despite the escalation of the Selic, which went from the historic low of 2% in March 2021 to the current 13.75% per year, the application of the passbook continues with the yield unchanged at 6.17% per year, plus the TR ( Referential Rate).

Savings remuneration is 0.5% per month whenever the Selic rate is above 8.5% per year. When the basic rate is up to 8.5%, the savings yield is equivalent to 70% of the Selic.

“In this scenario, savings, despite being an easy and safe application, is not competitive, yielding less than half of the Selic”, said Andrew Storfer, economics director at Anefac.

Inflation at levels still under pressure, added to the more restrictive financial conditions imposed by the advance of the Selic, has contributed to increasing withdrawals from savings.

In the first half of this year, withdrawals in savings accounts exceeded deposits by R$ 50.5 billion, according to data released by the BC.

In the first six months of the year, outflows of funds in the modality totaled BRL 1.808 trillion, while deposits totaled BRL 1.758 trillion.

This is the highest volume of redemptions for the period in the historical series, which began in January 1995. The previous negative record was in the first half of 2016, when there was a net withdrawal of R$ 42.61 billion.

The flow of funds in savings began to accumulate significant withdrawals in 2021, when Brazilian purchasing power fell significantly in the face of double-digit inflation and an intense interest rate shock.