Europe's €6.3 trillion in low-yield deposits erodes savers' purchasing power
A Revolut study shows that Europeans lose about €294 in real value for every €10,000 kept in bank deposits, with €6.3 trillion idle across 20 EU countries.
According to Revolut’s European Wealth Drain Index, €6.3 trillion sits in low-yield bank deposits across 20 EU member states, costing savers roughly €294 in real terms for every €10,000 held. The index, which combines a large consumer survey with deposit and inflation statistics, reveals that in 12 of the 20 markets, average one-year deposit rates fall short of inflation, with an average return of 2.76% versus 2.94% inflation.
Compared with the MSCI Europe ETF’s ten-year annualised return of 9.06%, households miss out on about €638 per €10,000 each year, amounting to €422 billion of growth capital not reaching businesses. The research points to three main reasons for the inertia: a majority never switched banks, many misjudge inflation-adjusted returns, and fragmented app usage hampers investment. Regional differences show Central and Eastern Europe face the widest gaps between deposit rates and inflation, while Western and Southern Europe hold the largest cash piles. European Commission President Ursula von der Leyen has highlighted the issue as a competitiveness challenge, proposing a Savings and Investments Union to channel idle savings into capital markets.
Why it matters
Idle savings reduce household wealth and limit capital available for European business growth.
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