When it comes to saving, Romanians prefer bank deposits, while the level of participation in the capital market is low, according to a research project carried out by Raiffeisen Bank and the Bucharest Academy of Economic Studies.

Bank deposits are the main form of savings Romanians resort to. Still, their level is the lowest compared to other countries in the region, such as Bulgaria, the Czech Republic, Poland or Croatia.

Romanians older than 65 prefer term deposits compared to younger people (< 60 years old). At the opposite end are those aged under 25, where only around 6% prefer term deposits. According to the analyzed data, 20% of those who hold term deposits have a university degree. A high level of education and income, and job stability are associated with holding a bank deposit. Furthermore, those living in urban areas with access to financial services are more likely to have a term deposit.

At the same time, the number of Romanians who have decided to contribute to the voluntary, Pillar III pensions has registered a continuous increase in recent years, with the total net assets managed by the ten voluntary pension funds active on the market exceeding EUR 950 million. It is a new historical high and highlights the increased interest of the population in ensuring additional income in retirement, the survey showed.

A total of 740,000 Romanians were enrolled in Pillar III of voluntary private pensions in mid-2024. Of this total, the share of those older than 55 registered a significant increase from 6% in 2011 to 22% in 2024. However, in the last 13 years, the participation of young people under 35 in Pillar III has decreased, while the participation of those aged 30 to 44 has remained relatively stable; the middle-aged category, of those aged between 45 and 54, has registered a moderate increase.

The income level is the main factor in the decision to opt for a voluntary pension scheme, followed by education. Compared to Romania, the profile of the participant in a voluntary pension scheme is better defined in the EU countries in the region (Bulgaria, Czech Republic, Poland, or Croatia), where the education and the degree of financial inclusion are extremely relevant, the research notes.

Nonetheless, during the Covid-19 pandemic, the profile of those contributing to voluntary pension funds diversified significantly, highlighting a growing saving-focused trend among those with stable jobs, in contrast with the reluctance shown by those with lower incomes and immediate financial priorities.

Stocks attract a different type of investor, due to the higher risks involved and the distinct motivations underlying these financial decisions. The survey notes that, in Romania, the relative risk aversion of investors in the capital market is higher compared to other more developed countries, like the USA, and similar to that observed in other countries in Central and Eastern Europe (CEE), such as the Czech Republic, Poland, and Croatia.

Young people are usually more willing to take risks in the hope of future gains, while older people prefer investments with more predictable returns. Income significantly determines the risk tolerance. People with higher incomes are more inclined to invest in risky financial products, as they have the financial capacity to cope with possible losses.

The decision to invest in different risky products, specific to the capital market, is more often seen in the case of people with a higher level of financial knowledge. Thus, financial literacy is a determining factor in shaping investment behavior, especially in the case of an emerging capital market such as Romania, the survey shows.

The study Saving and investment behavior among the Romanian population in a European context was conducted using data collected from sources such as national and European statistics, and studies conducted by financial institutions such as The OeNB Euro Survey, the National Institute of Statistics, the Financial Supervisory Authority and the Flash Eurobarometer FL525. The research is available in Romanian here.

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