Statistics 11 May 2023 10:00 AM

Popularity of fixed income investments increased

In the wake of rising interest rates, the popularity of deposits with an agreed maturity has grown among Finnish households.

In the wake of rising interest rates, the popularity of deposits with an agreed maturity has grown among Finnish households. During the first quarter of 2023, households made new deposits with an agreed maturity totalling almost EUR 3 billion, as opposed to only EUR 165 million in the same period a year earlier. In March 2023, the average interest on households’ new deposits with an agreed maturity rose to 2.40%, having stood at 0.41% in the same period a year earlier.

The stock of households’ deposits with an agreed maturity (EUR 6 billion) has grown fast in recent months. In the first quarter of 2023, the stock grew by EUR 2.4 billion. At the end of March 2023, deposits with an agreed maturity accounted for 5.5% of the whole household deposit stock (EUR 109.9 billion). In March, most (90%) of households’ deposit assets was held on current accounts (overnight deposits), with an average interest of 0.39%.

Popularity of short-term funds has increased

As regards fund types, most (EUR 213 million) of Finnish households’ net subscriptions in the first quarter of 2023 was made in bond funds.[1] Within the bond fund category, net subscriptions in short-term funds[2] were EUR 211 million and in long-term funds EUR 2 million. In addition to new investments, the value of bond funds appreciated by EUR 143 million in the first quarter of 2023. In 2022, households’ redemptions from bond funds clearly exceeded the new subscriptions. In addition, bond funds’ value declined in 2022.

Bond funds are households’ second-most popular fund investment type after equity funds. At the end of March 2023, households had EUR 8.2 billion of investments in bond funds, EUR 1.1 billion of which in short-term funds. In total, household had investments worth EUR 31.2 billion in Finnish investment funds and an additional EUR 5.5 billion in foreign investment funds.

In the first quarter of 2023, households also invested a further EUR 101 million in bonds. During the period of low interest rates, households’ debt security holdings decreased significantly. At the end of the March 2023, households had EUR 1.3 billion of debt security holdings.

Finnish deposits and investments (EUR million), 2023Q1
	All		Households		Employment pension schemes
	stock (flows)	change in valuation	stock (flows)	change in valuation	stock (flows)	change in valuation
Finnish investments
Listed shares	210 486	3 925	47 077	142	34 944	1 029
	(2 383)		(520)		(-586)
- in domestic shares	130 930	-106	41 606	-274	17 163	-181
	(912)		(415)		(162)
Bonds	224 498	1 147	1 349	8	29 760	88
	(9 691)		(101)		(2 110)
- in domestic bonds	103 638	823	803	5	4 171	40
	(1 761)		(105)		(354)
Fund shares
Domestic investment funds	109 267	2 484	31 187	773	5 151	100
	(755)		(423)		(-12)
Foreign funds	166 411	1 074	5 503	185	123 836	179
	(3 470 )		(141)		(2 125)
Finnish bank deposits
Overnight deposits (transaction accounts)	177 758	-85	98 562	-7	5 389	-5
	(-9 590)		(-3 340)		(-1 682)
Other deposits	17 611	-4	11 360	0	-*	-*
	(2 067)		(1 466)		-*