The number of millionaires increasing in Serbia as well
Overall savings in dinars in domestic banks has reached RSD62 billion, while foreign exchange savings is EUR10.08 billion. It is unknown how many millionaires in Serbia are, since there are no such records, but deposits by several hundred saving depositors exceed one million euros.
According to data of the National Bank of Serbia (NBS), there are 378 foreign exchange deposits in banks that exceed half a million. These saving depositors gave banks around EUR450 for safekeeping, meaning that the average value of savings deposit, which belong to a group with more than half a million euros, is around EUR1.2 million. The Central Bank does not have data on number of savings accounts exceeding half a million euros.
NBS statistics monitors savings accounts, not natural persons individually, thus it is not impossible for someone to have more savings accounts with savings exceeding half a million euros. The interesting thing is that number of these, tentatively called millionaires, is increasing, as a year earlier their number was 351.
Interest rates on foreign exchange savings are extremely low, but in the game of large numbers there is profit after all. For example, the annual interest rate for investment of EUR1 million is around EUR10,000.
However, these millionaires are just an exception. “General rule” refers to small stakes, because banks have majority of “small” savings up to EUR500. To be more accurate, there is around four million such savings, which is 81.2 percent of the overall number. Based on value, their stake in total foreign exchange savings is 0.9 percent.
According to NBS, data from January 29th, 2019 shows that overall savings in dinars in domestic banks reached RSD62 billion, while foreign exchange savings is EUR10,083 billion. Savings in dinars accounts for around five percent in overall savings, and its amount and participation are constantly growing. It increased by 23 percent in 2018 which, according to NBS, shows growing trust of citizens in dinar and monetary policy they pursue.
In central bank they regularly point out greater cost profitability of savings in dinars opposed to foreign exchange savings, both long-term and short-term. Attractiveness of savings in dinars opposed to foreign exchange is the result of relatively higher interest rates on savings in dinars opposed to foreign exchange, along with several other factors.
First of all, monetary stability provides a major contribution to greater profitability of savings in dinars. Furthermore, income based on interest rates that is realized on savings in dinars is exempt from taxation, unlike income on foreign exchange savings, which is subjected to taxation, the NBS says.