The volume of investment deposits has decreased
The analysis of investment deposits carried out by the Financial Supervision Authority indicated that the total amount of the investment deposits that expired from 1 January 2013 to 30 September 2014 was 68.8 million euros and the average return on investment deposits was 0.49%.
The Financial Supervision Authority also carried out a similar analysis for the period from 1 January 2009 to 30 June 2011, when 62,377 investment deposit contracts totalling 274 million euros expired. 20,376 investment deposit contracts expired during the last reviewed period. The number of banks that offered the option of setting up an investment deposits was six in 2011, three the year before last and two in the previous year.
An investment deposit is a fixed-term deposit the interest payable on which has not been agreed, but depends on the changes in the value of the underlying asset of the deposit. The underlying asset of a deposit may be securities, currencies, commodities, etc. In general, a combination of predominantly low-risk interest rate instruments and high-risk derivative instruments is used.
In terms of return on the funds invested in investment deposits, the division was as follows: 39% positive, 50% zero and 11% negative. Investment deposits related to the equity markets of the United States achieved the best returns.
The average return on the investment deposits that expired from 1 January 2009 to 30 June 2011 was negative (-0.46%). At the time, clients earned income on 16% of investment deposits, 51% had zero return and 33% had a negative return. Negative real rate of return is possible in the case of investment deposits whereby the client pays the bank a so-called risk premium. The risk premium is paid in addition to the deposited amount and it is not refundable.
The analysis of the Financial Supervision Authority was based on real rate of return, which means that all services fees were also taken into account when returns were calculated.
Exemption from income tax is not applied to the investment deposit contracts entered into from 1 January 2011 onwards.