Without realizing it, we lived for many years in an environment that was very unnatural. After all, if you wanted to improve your funds in some way, it was not enough to put them in a savings account or term deposit as standard, because they would be there at almost zero percent. After all, extremely low mortgage rates corresponded to this, when even 1.5% per year was no exception. Simply put, money wasn’t worth much.
False security
However, this has forced many ordinary savers and households to start looking at alternatives. Few people want to leave money in a non-interest-bearing account, but they would like it to bring them at least something. At the same time, a huge number of various business plans appeared, which raised money for themselves in the form of bonds.
According to experts, the Czechs now have a huge amount of funds in various bonds of dubious companies. The cases where someone put practically all of their savings into various bonds are no exception. These were usually new companies that relied on the fact that their prospectus had been approved by the Czech National Bank. However, this is a formality, the CNB does not actually check the credibility of the company and the sustainability of its business. However, the company immediately puts on its website that it has passed the inspection of the CNB.
Subsequently, the bonds are offered by various financial advisors, who get considerable commissions from it, and thus try to throw them among as many people as possible. And for a long time it played into their hands that they were able to promise an interest rate of perhaps 6 to 7% in an environment of zero interest rates. That seemed like a lot, especially when it was often presented as risk-free.
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It’s already falling
But in reality, you have entered into a really significant risk, which this return did not match at all. Usually the money was collected by all sorts of obscure developers, car wash operators, juice shops and similar businesses that banks or experienced investors would never even bother with.
Ordinary people gave large funds to the Premiot Group, for example, which recently went bankrupt, and it turned out that people will receive only a fraction of the invested funds back. Another favorite of households investing in bonds is the well-known Saunia. It boasts a nice product, which can be really good, but that doesn’t mean it’s also a good business. Today, this company attracts 12% interest on its bonds, has a debt exceeding 500 million crowns, and admits that it may not be able to handle it.
Read also: A secret tax suddenly applies in the Czech Republic. It takes a third of your lifetime savings. But the Czechs have no idea how they are being robbed
According to experts, there are still tens to hundreds of various dusty bonds and it is only a matter of time before it explodes in a big way. Then Czech households will begin to lose all their savings to a really significant extent.
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2023-10-13 16:00:00
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