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Inflation in Poland in 2021. Deposits and bonds. Will they protect savings?

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Inflation and low interest rates on accounts mean that keeping your savings in the bank will not save your money from losing purchasing power, according to an analysis by HRE Investments. Due to the scale of the price increases, even retail bonds hardly give any hope for real profits.

As explained by the chief analyst of HRE Investments, Bartosz Turek, a year ago the average interest rate on annual deposits was 0.16%. (NBP data for September 2020). This means that the bank added less than PLN 13 (after tax) to the amount of PLN 10,000. “This is 45 times too little to maintain the purchasing power of capital,” we read.

Interest rate for safe forms of investing capitalHRE Investments

Inflation and savings. Bonds protect only after the first year

The analysis recalled that in September inflation reached 5.8%.

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“This is bad news for all savers. It means that for such a basket of goods and services, for which a year ago you had to pay PLN 10,000, today you would have to spend as much as PLN 580 more” – reads the report.

This is also the case for almost all retail government bonds, according to HRE. If, in search of protection against inflation, someone would like to buy these securities today, you should be aware that in the first year of savings, protection against inflation will almost certainly not be their forte.

Interest on treasury bonds

It was explained that four-year bonds in the first period bear an interest of 1.3 percent, ten-year bonds “tempt” with a return of 1.7 percent, and the best twelve-year bonds (intended for 500 plus beneficiaries) at the beginning earn 2 percent.

“Only in the following years will the interest rate be indexed by inflation. As a result, if the inflation amounts to 3% next year, the four-year bond bought today will bear an interest rate of 3.75% in the second year (inflation plus 0.75 percentage point margin). , and a ten-year paper in the second year will earn 4% (inflation plus 1 percentage point margin) “- informs HRE.

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