ONE HALF of savings certificates, bonds and schemes held in Portuguese bank accounts are in the hands of the country’s wealthiest citizens, according to a new report.
Government Savings Bonds (Certificados de Aforro), which were launched in the 1960s with the aim of helping the middle and lower classes save money, are now an attractive investment product generally in the hands of richer citizens.
Around 42,000 individuals from a total of 716,000 investors now hold almost 8,900 million euros in savings schemes, which equates to around 50 per cent of a total investment of 17,773 million euros.
The shocking statistical data was revealed by the Instituto de Gestão da Tesouraria e do Crédito Público, a public body responsible for the issuing of savings bonds certificates (aforros).
On average, each one of the 42,000 holders of Certificados de Aforro has invested around 100,000 euros while 2,200 of those investors hold on average 250,000 euros in such bonds – the maximum that is allowed under the law.
The result is that six per cent of the total number of savings bonds certificate holders holds 50 per cent of the total value of the bonds.
With six-monthly guaranteed interest rates averaging out at 0.25 per cent, this government-backed savings product, even though it was aimed at small investors and the average man in the street, is benefiting the Portuguese rich.
Since savings bonds certificates offer better interest rates over the long term than ordinary bank deposit interest rates, those with high disposable incomes are likely to continue to channel their investments into these lucrative financial products.
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