Belgians entered year two of the coronavirus pandemic holding onto a record-setting €300.6 billion in regulated savings accounts.
While Belgians typically drop more euros into savings at the end of the year as their 13th-month or year-end pay bonuses arrive, De Tijd reports passing the €300 billion mark is significant for two reasons.
First, the high level of savings coincides with a drop in consumer spending. The National Bank of Belgium reports a side effect of Covid-related restrictions on travel and shopping resulted in a sharp decline in consumption last year.
Belgians, in turn, put in savings accounts the money not used for trips – either on holiday or to shops. However, the National Bank reports the rush to save was not even across the economy. Upper-income households were most likely to park euros into savings accounts.
Secondly, inflation rose by 5.71% during the past year, a rate far quicker than the minimal interest paid to regulated savings books, 0.01% base rate, and a 0.10% fidelity premium. In effect, De Tijd calculates savers lost €22 billion in purchasing power as a result, regardless of the capital gains they booked on investment funds and shares, The Brussels Times previously reported.
Still, regulated savings accounts are popular because of the security they offer. Up to €100,000 per person, per institution, is protected against bank failure by the Deposit and Financial Instrument Protection Fund.