Prague - In view of the global financial crisis, Czech savers are withdrawing their assets from mutual funds, which are considered relatively risky, and moving them to secured funds, time deposits, and building societies.

"The current development in the financial markets is really moving people towards secured funds. This is mainly the case for investors who were active in mixed and stock funds. Secured funds have experienced approximately a 50 percent increase in sales in the last month," said Jan Bárta, CEO at ČSOB's investment unit.

Investment funds are regarded as secured if they guarantee that the investors' assets will never shrink. This provision is stipulated in the contract between a secured fund and the participant.

Time deposits rediscovered

Czech banks say their clients are now also rediscovering time deposits, which have recently increased their interest rates.

"The sum of time deposits has increased in the last week," says Ivo Měšťánek from ČSOB's press department.

A number of Czech banks currently offer an interest rate of 3.2 percent per year for deposits over CZK 1 million. Some banks even offer a yield of more than 3.5 percent for a certain type of deposits.

Another reason behind the revival of time deposits is that they are insured by law. The state currently guarantees 90 percent of an individual's bank savings up to EUR 25,000. A draft amendment sent by the cabinet to the parliament would increase the guarantee to cover 100 percent of savings up to EUR 50,000.

Building societies among safest investments

Another increasingly attractive form of secured investment is building societies' savings plans. Although not officially confirmed, it is believed that both the volume of deposits and the number of new contracts are rising.

Analysts consider building societies one of the safest ways of appreciating one's savings.

"The investment options for building societies are restricted by law in order to prevent risky transactions that might lead to losses," said Jiří Šedivý, secretary of the Association of Czech Building Savings Banks.