2024-05-08 17:29:49
The EU’s interest rate policy has benefited German savers brought a windfall. Your assets are climbing to new highs. This is how much money a private household has.
Private households in Germany had net financial assets of 245.6 billion euros in 2023, after 215.5 billion euros in 2022. The savings rate rose from 11.1 to 11.4 percent and remains in the upper range of its average since reunification. This is the result of a study by the Federal Association of German Volksbanks and Raiffeisenbanks. V. (BVR) for the accumulation of financial assets by German citizens.
Time deposits are attractive again
After stocks and investment funds recorded particularly high inflows during the low interest rate phase and in the wake of the corona pandemic, fixed-interest investments are now also becoming more attractive, according to the study.
In 2023, German savers increased their holdings of time deposits and pension securities by a good half compared to the previous year and increased the volume of savings bonds held fivefold.
“Savers are reacting to the change in interest rates by converting their portfolios towards larger shares of fixed-term securities and time deposits. We are experiencing a return to normality with positive interest rates, combined with greater diversification of forms of savings,” said BVR chief economist Dr. Andreas Bley.
Division of financial assets
A look at the individual components of the savings forms shows: options with higher interest rates increased significantly in both securities and bank deposits. At 194.2 billion euros, the assets invested in time deposits increased by a good half (55.2 percent) compared to the previous year at the end of 2023.
At the end of the year, 101.1 billion euros more were invested in savings bonds than at the end of 2022, an increase of 453 percent – more than a fivefold increase. Financial assets invested in bonds or bonds rose by 51.2 percent to 229.7 billion euros.
The total financial assets of private households, which include not only employed people and other private individuals, but also economically self-employed people and organizations such as clubs, unions and churches, amounted to 7.9 trillion euros at the end of 2023. In contrast, there were liabilities amounting to 2.17 trillion euros.
The net financial assets per household amounted to 139,500 euros, of which an average of around 41 percent was invested in banks, 30 percent in insurance companies and 29 percent in securities.
High savings rate and consumer restraint
The disposable income of private households climbed by 5.9 percent to 2.36 trillion euros in 2023 compared to the previous year, at the same rate as inflation. Due to the uncertain economic situation and only slowly declining inflation rates last year, many consumers held back on spending. At the same time, the savings rate of private households rose slightly from 11.1 to 11.4 percent.
According to the Federal Statistical Office, only a few countries have a higher savings rate than Germany. These include the Swiss with 18.4 percent and the Dutch with 12.7 percent. Private households in the USA save around 2.1 percent of their income, the Japanese around 5.4 percent and the Italians 2.1 percent.
Real estate less in demand
Andreas Bley from BVR sees the high inflow of funds into time deposits as positive, as broad sections of the population use attractive forms of investment for individual savings goals. However, the chief economist is critical of the high savings rate combined with low borrowing and thus declining wealth creation, for example in real estate.
“The severe housing shortage and the need for energy-related renovations require significantly higher investments not only from housing companies, but also from private households and the associated increase in borrowing,” explains Bley.