Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109513
Authors: 
Deuflhard, Florian
Georgarakos, Dimitris
Inderst, Roman
Year of Publication: 
2015
Series/Report no.: 
IMFS Working Paper Series 88
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.
Subjects: 
financial literacy
savings accounts
interest rates
household finance
JEL: 
D12
E21
G11
G21
Document Type: 
Working Paper

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