Savings withdrawals hit all-time peak

The balance of savings deposits has gone down for the sixth consecutive month. According to a Central Bank release Monday (July 6), Brazilians have withdrawn $12.2 billion more than they deposited in savings s in the first half of 2015. Savings saw the worst net inflow (deposits minus withdrawals) for the period ever.

From January to June, Brazilians put $289.5 billion in savings, but withdrawals totaled $301.7 billion. In June alone, they withdrew $2 billion more than they deposited in savings s (resulting from $51.8 billion in deposits and $53.8 billion in withdrawals), the worst net inflow recorded for the month.

The savings drain can be traced to a number of factors. First, a rising benchmark interest rate has made savings less appealing compared to other investments. According to the National Association of Finance, Management and ing Executives (ANEFAC), putting money into a savings is only more advantageous than investment funds for periods shorter than six months, even though savings s are exempt from income tax and management fees.

Inflationary pressures have also led savings to lose some of its attractiveness. Furthermore, rising prices and consumer indebtedness have reduced people's spare money.

Translated by Mayra Borges