Carinthian banks warn inflation erodes passbook returns

Banks in Carinthia are advising savers to consider investments beyond traditional passbooks, whose returns are being outpaced by inflation, ORF reported on Friday. Many banks in the Austrian state are marking World Savings Day this week.

Passbooks remain Carinthia’s most popular form of investment. With longer fixed terms, they currently offer interest of up to 3 percent, but inflation largely cancels out the gains. “In real terms, it is a loss,” said Siegfried Huber, a board member of Kärntner Sparkasse. For people thinking long term, he recommended investing monthly in the capital market, including with a view to providing for children and grandchildren.

Advisers at Raiffeisenbank in Carinthia also recommend combining savings accounts with securities, which can offer higher returns but carry greater risk. Options include equity funds, fixed-interest securities and government bonds, said board member Manfred Wilhelmer.

The Bank für Kärnten und Steiermark, known as BKS, has also observed a shift towards online savings products and investment in securities, said board member Clemens Bousquet.

Wilhelmer cautioned that promotional rates on online savings accounts may apply for only a few months. Savers should check how long the interest rate is fixed and what happens when that period ends, he said. Personal advice remains important, he added.