In Ukraine, it is more profitable to store money under a “mattress” than in banks
Kyiv, April 05 (PolitNavigator, Vladimir Raichenko) – In Ukraine it is much more profitable to store money under a “mattress” than in banks.
Ivan Kompan, partner of Kompan Consulting, teacher of the Finance course at Edinburgh Business School in Eastern Europe, comes to this conclusion in an author’s column on the pages of the Kyiv magazine “New Time”.
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“$1 invested in a mattress at the beginning of 2005 would now turn from 5 UAH into 27,” the author writes. – On the other hand, what would you get by using the services of Ukrainian banks, keeping money on a hryvnia deposit for ten years? If we take the average banking industry deposit rates for individuals, published by the NBU, for the calculation, then the same 5 UAH deposited at the beginning of 2015 would today turn into 23. This is inferior to the “mattress” strategy, and if we add risk non-return or untimely return of deposits, approved at one time by the NBU, then the unattractiveness of a bank deposit will become even more obvious.”
At the same time, the expert notes, if you trusted Ukrainian stock market specialists and invested in the best of their funds, in 10 years you would be able to turn 5 hryvnia into only 16, which is even worse than a deposit and much worse than a “mattress.” At the same time, Ivan Kompan admits that a dollar deposit at the average NBU rate would theoretically allow turning 5 hryvnia into 60, but makes a significant reservation.
“Firstly, the applied average rates for the year include offers from all banks in Ukraine, but not all of them were able to survive to this day,” he emphasizes. – The majority “died”, taking, following the example of the ancient Egyptians, all the property of the investors with them to the grave.
Those who entrusted their money to more reliable banks, primarily those with foreign capital, were able to turn 5 UAH into 35. But even here they failed. The hard-earned 35 UAH is not quite yours yet. Because you can’t just go to the bank, take money from the cash register and take it home. If the deposit is large enough, the NBU will not allow this, strictly regulating your needs at the equivalent of 15 thousand UAH per day.”
In Ukraine, it's more profitable to keep money under a mattress than in banks.