Family capital to lose third of its value after 18 years

The interest rate on Family Capital deposit accounts opened in 2015 will be 0.6288% per annum. It was reported by BelTA with reference to the Ministry of Finance. The interest rate on the Family Capital deposit is set at the level of Libor rate.

Starting from January 1, 2015 families in Belarus can get the so-called Family Capital in the amount of 10 thousand US dollars. Families with three children, with the last one being in 2015 can count on the money which can be spent on improving the living conditions, education and so on.

Senior Analyst of Alpari, Vadzim Iosub, says that with dollar inflation in the US less than 2% (we use USD, since deposits will be in USD rather than in Belarusian rubles), after 18 years (Family Capital time frame) prices in the US will grow by about 43%.

"The profit of this deposit after 18 years will be about 12%. Prices could rise by 42%, while the deposit - only 12%. That is, the money will lose their purchasing power," says the analyst.

Thus, 18 years later, when the family capital is available, the money will lose a third of its value.

But the analysts was most surprised by the fact that the deposit rate is tied to the rate of Libor (London Interbank Offered Rate) - weighted average interest rate on interbank loan banks.

"The rate of Libor is the rate at which foreign currency loans upscale banks in London. But here, in Belarus, we have our own market of foreign currency loans and deposits. Deposits here are issued at about 5.5%, corporate loans - at 10%. What to do with the money so that it works? Lend it. This will be charged at 0.6% on capital. It turns out that all the margin is a profit of the bank? The Bank adds to the capital 0.6%, has the money for a loan at 10% - and it turns out that 9.5% is a profit of the bank," says Vadzim Iosub.

The experts doubts that all this time the loans will be issued at 10%, but in this situation, Belarusbank will earn good money on the Family Capital.

Photos - finatica.by