Despite higher interest rates on dinar savings, many citizens still prefer to save in foreign currency. According to Professor Ismail Musabegović from the Belgrade Banking Academy, this trend stems from the crises of the 1990s, when hyperinflation undermined confidence in the dinar.
However, recent data from the National Bank of Serbia (NBS) shows that dinar savings are on the rise. As of October 25, local currency savings reached 175.5 billion dinars, nearly 50% more than last year. In contrast, foreign currency savings total 15.1 billion euros, an increase of 712.5 million euros (4.9%) since the beginning of the year.
Currently, there are approximately 996,662 savings accounts in dinars and about 4.7 million in foreign currencies. The NBS reported that average interest rates on new dinar deposits decreased by 0.82 percentage points this year, with rates for short-term deposits hovering around 4.43% for general savings and up to 4.75% for longer terms. For foreign currency savings, the reduction was steeper, averaging 0.89 percentage points to 2.86%.
Many citizens likely choose euros out of habit, despite the higher returns available from dinar deposits. This lingering mistrust towards the dinar reflects a historical context that has not yet faded, even as government protections for deposits have increased from €5,000 to €50,000, with expectations for further rises.
The Deposit Insurance Agency noted that at the end of September, insured deposits in Serbia totaled €31.3 billion, an increase of nearly €3.6 billion compared to the previous year. This growth trend has continued since 2008, when insured deposits were only €7.3 billion.
Research indicates that approximately two-thirds of insured deposits belong to individual citizens, with about 99% fully covered by the deposit insurance system. Although many still prefer to keep money in euros, the stable dinar exchange rate and favorable tax treatment for dinar savings encourage growth in this area.
Professor Musabegović also highlighted the cultural aspect of saving, noting that many citizens still keep cash at home as a precaution. This reflects a mentality shaped by past economic instability, even as banking confidence has generally increased.
The NBS emphasized that the growth of savings signifies a positive socio-economic trend, as it indicates that citizens are planning for the future and securing financial stability. The ongoing increase in both dinar and foreign currency savings demonstrates a robust trust in the banking system, despite global economic challenges.
Ultimately, the choice of where to save—whether in dinars or euros—remains a personal decision influenced by individual preferences and risk tolerance.
