By Chesney Hearst, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – The number of Brazilian investors with over R$1 million in savings accounts has increased by 160 percent in the last five years, with the number reaching 10,145 people in 2013 up from 3,914 in 2008, according to a study from Brazil’s Central Bank.

Brazil savings accounts rise, Rio de Janeiro, Brazil News
Brazilian savings account show increases in the past five years, photo by Benjamin Thompson/Flickr Creative Commons License.

Reasons for the increase in savings vary, analysts claim, but risk aversion to fear of inflation and the return of an unstable economy may be among the chief factors driving this phenomenon. Experts say it is professionals who are choosing to put their money in savings accounts, as opposed to investing in stock.

“They are professionals who have earned money from their work and do not want to put their capital at risk,” superintendent of Santander Brazil investments Sinara Polycarpo told O Globo. “Many of them are like scalded cats that have had bad experiences in other areas. With savings yields of a little over six percent per year, they basically can protect their money from inflation and allow their purchasing power to grow.”

Many of the current millionaire savers are also older and lived through periods of the country’s economic instability, including the hyperinflation of the 1980s and 1990s.

One Brazilian saver told O Globo about his US$2 million in loss in investment funds. “That was the end for me. I withdrew what I had left and put it all in savings,” the man who preferred to remain anonymous told O Globo.

While increased savings when combined with decreased investments could have broader implications for the country’s monetary policies, the saver told O Globo; “The fact is that saving is the safest place in the short term. In the long run, of course, only God knows.”

Read more (in Portuguese).

* The Rio Times Daily Updates feature is offered to help keep you up-to-date with important news as it happens.


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