Europeans hold €10 trillion in deposits: how the EU wants to make this money work

Around €10 trillion of European household savings are currently in bank deposits with relatively low yields. The EU wants to channel at least part of this money into capital markets — into stocks, bonds, investment funds and pension products. For Europeans themselves, this should open the opportunity to earn more on long-term savings, while for the economy it would give companies an additional source of financing.

The scale of the sum is enormous. The Council of the EU estimates the volume of household savings placed in low-yield bank deposits at around €10 trillion. Brussels believes that the current structure of savings does not allow a significant part of private capital to be used as efficiently as possible for financing businesses and investments.

To address this problem, the EU is developing the Savings and Investments Union. Its task is to simplify the transition of part of Europeans’ savings from ordinary bank accounts to investment instruments.

However, the word “channel” does not mean that Brussels is going to forcibly take money from deposits or make people buy stocks. The main approach is based on voluntary investments, simpler accounts, tax incentives, financial education and the removal of barriers between the markets of different EU countries.

Why have €10 trillion in deposits become a problem for the EU?

Bank deposits remain one of the most understandable and safe ways to store money. They provide quick access to funds and, within established limits, are protected by deposit guarantee systems.

But this security has a downside: the return on deposits is usually lower than the potential long-term return on capital market investments.

The European Commission offers a telling comparison. According to its calculations, if money had been invested in the European stock market from 2009 to 2024, the value of such an investment, after inflation, would have increased by more than 50%. The same amount left on deposits would have lost more than 10% of its real purchasing power over that period.

This does not mean that stocks are always more profitable than deposits. Market investments can fall in price, and historical returns do not guarantee future results. The European Commission itself stresses that investments carry risks and that part of savings must be kept in liquid form for unexpected expenses.

The problem for the EU lies rather in the proportion: European families traditionally keep a very large share of their financial assets in banks, while US residents invest much more actively through the stock market, pension funds and other instruments.

Europe needs hundreds of billions of euros of new investment every year

Brussels’ interest in private savings is driven not only by a desire to increase Europeans’ incomes.

The EU needs to finance the energy transition, digitalisation, defence, infrastructure and technology companies. According to an estimate used by the European Commission, based on a report by Mario Draghi on Europe’s competitiveness, by 2030 the EU will need an additional €750–800 billion of investment annually. Increased defence spending makes the need even greater.

Government budgets alone are not enough for this.

The problem is particularly acute for small and medium-sized businesses, innovative companies and technology start-ups. In Europe, they depend significantly more on bank lending, whereas in the US firms can more often raise capital directly through the markets.

Therefore, European authorities want to create a more direct chain: citizens’ savings — investment products — companies and projects that need capital.

What does the EU intend to offer ordinary depositors?

One of the central elements of the reform is special Savings and Investment Accounts.

The idea is to create a simple account through which a person can buy stocks, bonds or investment funds without having to navigate the complex infrastructure of the stock market on their own.

Such accounts already exist in a number of EU countries. The European Commission recommends that member states that do not have them create such instruments, and that countries with existing programmes make them more attractive.

Among the main incentives under consideration are simplified taxation and tax breaks for private investors.

Under the European Commission’s model, one can start investing through such an account with small amounts — in some variants from about €10 per month. The accounts should be provided by regulated financial institutions, including traditional and online banks.

The owner retains control over where to invest the money. There is no automatic transfer of a bank deposit into stocks.

The EU also wants to change pension savings

Another area concerns long-term pension investments.

The EU already has a pan-European personal pension product, PEPP — Pan-European Personal Pension Product. It was conceived as a voluntary pension instrument that a person can use in different EU countries.

However, PEPP has not yet become widespread. The European Commission has proposed revising the rules to simplify the product, make it cheaper and easier to distribute online.

In June 2026, the Council of the EU agreed its negotiating position on the PEPP reform. The proposed changes should give providers more flexibility while maintaining a high level of consumer protection.

The logic is the same: part of the money that Europeans set aside for decades should not just sit in accounts but work through capital markets and finance the European economy.

Why European money does not stay in Europe

Another problem is the fragmentation of the European market itself.

Formally, the EU is a single market, but the financial system is still largely divided by national rules, tax regimes, infrastructure and supervisory specifics.

An investor from one country may find it considerably harder to buy financial products or invest through a company from another EU country than the idea of a single European market would suggest.

In December 2025, the European Commission presented a separate package of measures on integration and supervision of capital markets. Its task is to remove some national barriers, simplify cross-border investment and make it easier for companies to raise capital across the EU.

Brussels hopes that a more unified market will help keep more European savings within the EU economy instead of investors channeling capital mainly to deeper and more liquid US markets.

Europeans will first have to be convinced to invest

Creating new accounts is not enough. Many EU citizens consciously choose bank deposits precisely because they perceive investments as too complicated or risky.

This is linked to another part of the strategy — improving financial literacy.

According to Eurobarometer data for 2023, cited by the Council of the EU, only about 18% of EU citizens have a high level of financial literacy.

The European Commission has therefore launched a dedicated strategy to help people better understand inflation, investment risk, diversification, pension savings and protection against financial fraud.

This is critically important: moving money from a guaranteed bank deposit to the market means accepting new risk. The price of stocks, bonds and funds can fall, and an investor can suffer a loss, especially over a short horizon.

Does this mean that keeping money on deposit will become unprofitable?

No. The EU does not plan to abolish deposits and does not claim that all savings must be invested.

Bank accounts serve a different function: they provide liquidity and are suitable for an emergency fund, current expenses and money that may be needed soon.

Even in materials about the new investment accounts, the European Commission specifically recommends keeping part of the funds accessible for unexpected expenses.

The issue is above all long-term savings — money that a person does not plan to use for years and that, due to inflation, can gradually lose purchasing power in a low-yield account.

What Brussels ultimately wants to change

In fact, the EU is trying to change one of the fundamental features of the European financial system.

Europeans save a lot, but a significant part of this money remains in the banking system. At the same time, European companies complain about a lack of equity capital, and promising technology projects often seek financing outside the EU.

The Council of the EU expects that a full-fledged Savings and Investments Union could channel additional hundreds of billions of euros into the European economy every year.

For ordinary people, the changes could turn out to be much more mundane: the emergence of simpler investment accounts, tax breaks, new pension products and the ability to buy financial instruments more easily across the EU.

Brussels’ main expectation is that at least part of the roughly €10 trillion that European families currently hold in bank deposits will gradually move into long-term investments.

But the final decision must remain with the owner of the money: a deposit gives greater predictability and capital protection, while the market offers potentially higher returns in exchange for higher risk.

Based on: Council of the European Union, European Commission — Savings and Investments Union, European Commission — Savings and Investment Accounts