Financial literacy and savings account returns

Florian Deuflhard, Dimitris Georgarakos and Roman Inderst

No 88, IMFS Working Paper Series from Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)

Abstract: Savings accounts are owned by most households, but little is known about the performance of households' investments. We create a unique dataset by matching information on individual savings accounts from the DNB Household Survey with market data on account-specific interest rates and characteristics. We document considerable heterogeneity in returns across households, which can be partly explained by financial sophistication. A one-standard deviation increase in financial literacy is associated with a 13% increase compared to the median interest rate. We isolate the usage of modern technology (online accounts) as one channel through which financial literacy has a positive association with returns.

Keywords: financial literacy; savings accounts; interest rates; household finance (search for similar items in EconPapers)
JEL-codes: D12 E21 G11 G21 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/109513/1/822876590.pdf (application/pdf)

Related works:
Journal Article: Financial Literacy and Savings Account Returns (2019)
Working Paper: Financial literacy and savings account returns (2015)
Working Paper: Financial Literacy and Savings Account Returns (2014)
Working Paper: Financial Literacy and Savings Account Returns (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:imfswp:88

Access Statistics for this paper

More papers in IMFS Working Paper Series from Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().