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Hungarians put Ft 200 bln into savings funds in rush to beat tax hike

Residents appear set to invest more than Ft 200 billion (about €725 million) into various funds in a rush to beat the introduction of a 20% capital gains tax on September 1, business daily Napi Gazdaság reported on Wednesday.

Many banks have extended their opening hours to accommodate the much larger-than-usual numbers of customers seeking to invest whatever money they can set aside. Although the tax was announced in June, most residential customers waited until the end of August to invest their money, according to Volksbank Zrt division head János Pisák.
A representative of Erste Bank Hungary Rt told the paper that twelve-month fixed-rate deposits had proved especially popular in the run-up to the tax increase. More than 10% of the bank's total deposits have been tied down for a year.
OTP Bank Nyrt, Hungary's biggest retail bank, also reported a big increase in twelve-month fixed-rate deposits. OTP said that money market funds and mortgage bonds were also in demand.
Citibank Zrt official Éva Devics said the tax hike had convinced residential customers that it was worth separating the funds they need on short-term from their long-term savings.