Selic: Savings reaches the highest real gain since 2017 – 06/21/2023 – Market

With the slowdown in inflation observed over the last few months, savings reached the biggest real gain since October 2017 in May.

According to a survey by Einar Rivero, from the TradeMap platform, savings yielded 4.40% above inflation in a 12-month period ended in May 2023, the highest real return since October 2017, when the accumulated result was 4.44 %.

Between September 2020 and August 2022, savings delivered a negative real return to savers in the accumulated 12 months, at a time of rising price indices caused by the resumption of activities after the most acute phase of the Covid-19 pandemic and by the volume of fiscal and monetary stimuli promoted by the government in the economies.

Since September of last year, however, the application has returned to deliver a real positive return, in the wake of the loss of breath of inflationary pressure.

With the truce in airfare, gasoline and food prices, Brazil’s official inflation index slowed to 0.23% in May.

It was the smallest change in the IPCA (Broad National Consumer Price Index) for the month since 2020 (-0.38%), when the beginning of the pandemic paralyzed economic activities.

The index reached 3.94% in the accumulated 12 months through May. It is the lowest level since October 2020 (3.92%).

Despite the growing real gain, savings remain low in the assessment of market specialists, not least because it remains well below the 13.75% yield of the Selic.

“I do not recommend the allocation in savings. The account is paying below the profitability of assets linked to the Selic and the CDI and should continue like this for a long time”, says Paloma Brum, analyst at Toro Investimentos.

Head of the research area at Guide Investimentos, Fernando Siqueira adds that many people keep their money in savings because of the possibility of withdrawing it at any time and the low risk. He points out, however, that there are more profitable options with the same characteristics. “I don’t see the need to have a lot of resources in savings, since there are applications that yield more and also have very low risk, such as CDBs”, says Siqueira.

“Several banks already offer digital accounts that yield 100% of the CDI, an amount well above the interest paid for savings”, says João Daronco, an analyst at Suno Research.

The most recent data from BC (Central Bank) show that, in 2019, about 164 million people still had some resources kept in savings.

In any case, withdrawals from the application have been on the rise over the last few months, amidst a scenario of high interest rates, which reduces the competitiveness of the account compared to other investments.

The savings rate is 0.5% per month whenever the Selic rate is above 8.5% per year, plus the TR (Referential Rate), around 2.2% in 12 months, resulting in gross profitability approximately 8.5% of the application. When the basic rate is up to 8.5%, the savings yield is equivalent to 70% of the Selic plus the TR.

In May 2023, the application recorded net redemptions for the fifth consecutive month, i.e., more withdrawals were made than deposits in the passbook. The financial investment recorded a net withdrawal of R$ 11.747 billion last month, after a net loss of R$ 6.252 billion in April.

In May last year, there were net deposits of BRL 3.515 billion, but 2022 ended with a record accumulated total redemption of BRL 103.237 billion, in the second year in a row of investment losses.

In the year, until May, savings accumulate withdrawals of R$ 69.232 billion.