Microsaving gains popularity but savings use to cover costs: OP

The pandemic made Finnish people value saving money even more than before, said OP Financial Group in a recent press release.

One form of saving that has increased in popularity in recent years is microsaving, which is based on saving small sums at a time.

In OP's popular Money Box service, the average amount saved in a year is around one thousand euros, but more and more customers have begun to use the savings to cover daily expenses.

Deposits in the OP Money Box service grew steadily until February this year, but in March, the growth stopped and fell slightly.

The number of new accounts opened is still high at around 7,000 a month, but users are saving less and less money. People are transferring funds to current accounts for use or are forced to dip into savings.

“We can see that the popularity of saving is growing, but due to the rise in the cost of living, our customers have less money to set aside than before. Deposits in the Money Box service have fallen slightly, and the average deposit has also shrunk,” said Noora Heikkinen, Business Lead, Accounts and Daily Banking at OP Financial Group.

During the pandemic, people in Finland were able to save money due to the travel restrictions, among other reasons. After restrictions were lifted, people began using these savings. Now, a growing share of people’s earnings is spent on energy bills, loan repayments, food and other rising costs. OP Financial Group’s data shows that the disposable income of average earners now buys about 200–600 euros less per month than a year ago.

Money Box is an account that encourages saving small sums every day to pay for surprise expenses, a holiday trip or another purchase. Saving in the Money Box account can be done using monthly deposits or with microsaving, where you save the sum you want whenever you pay by card. Data shows that on average, the sum saved with microsaving is 1.4 euros.

On average, users of the Money Box service save about 80 euros a month, which adds up to 960 euros in a year.

“In this way, small sums grow into savings that can serve as a comfortable buffer for daily finances or be used to fulfil a dream. It's advisable to link your payment card and savings account. Saved sums can also be easily invested in a fund,” said Heikkinen.