High yield with low risk. A survey shows that secondary school students expect the impossible from the financial market
Prague, 13th January 2022 - At the end of November, the Financial Market Guarantee System questioned secondary school students (aged 18-19 years) at the Gaudeamus university education exhibition in Brno about their knowledge of the finance and banking market. Between 23 and 26 November 2021, 121 students in the 3rd and 4th years of secondary school took part in the survey.
The survey showed that students are aware of the most basic banking products. Almost all the respondents (97%) knew about current and savings accounts, with building savings performing similarly well, known to 91% of students. Students showed a relatively high awareness of supplementary pension insurance (79%). On the other hand, there is low knowledge among students of term deposits (44%) and investment products like mutual funds (37%), while only 8% of students know about subordinated deposits.
The majority of students (95%) said they were saving money. They most often save money on current or savings accounts (79%), but some of them also save using building savings (30%) or in the equivalent of piggy banks (26%). A quarter of students said they save using cryptocurrencies.
97% of students have already an experience with cryptocurrencies. 24% of students have invested in a cryptocurrency at least once, while another 27% are considering such an investment.
This positive attitude to investment was confirmed by the answers to the question of what students would do with a theoretical 50,000 crowns received from their grandparents to be used to buy a holiday next year. 31% said they would invest the money to increase its value. More than half (51%) would deposit the funds on a current or savings account, and 7% even on a building savings account.
Hardly any students knew of cooperative credit unions
When asked about their trust in individual types of financial institutions, students clearly stated that they trust banks (90%) and building savings banks (80%). More than half of the respondents could not say how they felt about cooperative credit unions. Cryptocurrency exchanges (45%) and stock exchanges (38%) were also trusted less. Pension funds are trusted by 60% of students.
The interest rate and deposit insurance are important
The Guarantee System also investigated what students consider is important when choosing a savings or investment product. The interest rate and return on investment are important for 99% of students, as is the level of fees (97%). The risk level is important for 93% of students, and the fact whether a financial product is insured was considered important by 83% of respondents.
On the other hand, students generally perceive as less important whether a financial institution has been operating on the Czech market for a longer period of time (58% of students identified this as important) or whether someone they know or they themselves have had experience with such financial institution (important for 56% of respondents).
Over half the students surveyed (54%) knew that their deposits in banks, building savings banks and cooperative credit unions are insured. They most often learned this from someone they know (32%) or from school (16%). Only 6% of students apparently received this information from their financial institution.
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