According to data from the Croatian National Bank, at the end of August total household deposits amounted to as much as 41.9 billion euros, which is an increase of 3.3 billion euros compared to the same period last year.

Although savings in banks are growing, fewer and fewer citizens are deciding to place their money in fixed-term deposits, because interest rates on fixed-term deposits have almost halved, writes index.hr. Over the past year, the share of fixed-term savings fell from 29.2 to 24.7 percent, while the average interest rate dropped to just 1.5 percent.

Citizens keep more money in accounts than in fixed-term deposits

The largest part of savings, around 31.5 billion euros, is held in citizens' current and giro accounts, while fixed-term deposits amount to only 10.3 billion euros. The HNB explains that citizens are increasingly choosing 'flexible savings' because fixed-term deposit interest rates are no longer worthwhile. In addition, a growing number of people are redirecting money into government bonds and 'people's' treasury bills, which offer security and a somewhat better return than traditional bank savings.

Savings growth driven by increased lending

Total deposits of domestic sectors, excluding the state, rose to 62.5 billion euros, which is an increase of 4.5 billion compared to last year. The HNB points out that this was mainly contributed to by the growth in lending to citizens, but also by banks' investments in government bonds. In the same period, the state reduced its deposits with the HNB, thereby further increasing the available money in the system.

Where is the most saving taking place?

According to an analysis by the Croatian Chamber of Economy, the average resident of Croatia has 10,679 euros in savings, but the differences among counties are large. The citizens of Istria County save the most, with an average of 15,120 euros per resident, followed by the residents of Zagreb with 14,243 euros. The least savings are held by residents of Vukovar-Srijem and Virovitica-Podravina counties, with average amounts of around 5,000 euros.

Savings are changing, trust in banks remains

Despite the decline in fixed-term savings, citizens still trust banks the most. More than two thirds of savings are held in transaction accounts, while the share of fixed-term deposits continues to fall. Experts estimate that this trend will continue in the coming months, especially if interest rates are lowered further and if the state continues to offer attractive forms of investment through bonds and bills.