Europe deposit rates still trail inflation
Europeans are losing purchasing power on their cash savings because deposit rates are still below inflation in much of the region, leaving tens of billions of euros sitting in accounts that do not keep up with rising prices.
Revolut said its survey of 20,007 adults across the European Union found that people in the bloc lose an average of €294 in real value each year for every €10,000 held in a bank account, as €6.3 trillion remains parked in low-yield deposits across 20 EU countries. The bank’s European Wealth Outflow Index shows the core issue is not that savers are taking losses on paper, but that the money in their accounts buys less over time.
The gap matters economically because it weakens household resilience and keeps more capital out of productive uses. Revolut said the average one-year deposit rate across the countries it studied is 2.76%, below average inflation of 2.94%, meaning nominal interest can be positive while real returns are negative.
That mismatch is most pronounced in parts of central and eastern Europe, where the difference between inflation and deposit rates is widest. Bulgaria shows a gap of 2.3 percentage points, followed by Slovakia at 1.7 points and Lithuania at 1.3 points, according to the study.
For investors, the story underscores why retail money is starting to look beyond cash. In Bulgaria and Romania, 51% of respondents said they would be willing to begin investing small amounts, suggesting a possible shift from deposits into funds, brokerages and other risk assets if confidence and financial literacy improve.
The research also highlights how passive many savers remain. Two-thirds of respondents said they have never switched banks to get a better rate, while almost half misjudge how much their money really earns after inflation and 19% do not realize that rising prices reduce the value of their savings at all.
Western Europe holds the largest pile of cash, with Germany at about €1.9 trillion in deposits and France at €588 billion, making the region’s weak real returns economically important even if headline balances appear large. In northern Europe, the gap between deposit rates and inflation is narrower, but fewer than 40% of respondents in Denmark and Sweden said they understand how inflation erodes money over time.
The broader investment implication is straightforward: as long as inflation outpaces deposit yields, cash will remain a shrinking asset for households. That should keep pressure on banks to lift savings offers, and on platforms such as Revolut to convert deposit holders into active investors as the inflation debate stays central across Europe.
| Entity | Gains | Losses |
|---|---|---|
| Banks with low-yield deposits | ▲Cheap funding | ▼Savers’ real returns |
| Retail investors | ▲More incentive to invest | ▼Cash hoarders |
| European households | ▲Potentially higher income from switching | ▼Purchasing power on deposits |
| Revolut and similar platforms | ▲More demand for investing products | ▼Traditional savings-only banks |