Which Country Has The Highest Savings Rate?

by on December 4, 2011

Are you a good saver?  I mean, do you save a large percent of your income each month?  Believe it or not, the biggest factor in how much money you save each month (as a percent of your income) depends on where you live.  For example, people in emerging countries like China and India save much more of their income than people in the US, Canda or the UK.  We did a little research using data from the OECD and the Worldbank and have put together some interesting stats on how countries save.  Note that not all countries report their figures in the same way, so these numbers are more ballpark than exact, but nonetheless, they are interesting.  Here are some of the takeaways.

Developing Countries Save More Money

The savings rate of China is about 50%, and is by far the highest percent we found for any country. It’s amazing that almost half of all income is saved rather than spent.  We’re not sure why China’s saving rate is so high but the percent has climbed steadily since the government liberalized their economy back in 1992.  Maybe the extra financial freedom was incentive to save more money.  It may also have something to do with the strict population control policy that the government has implemented.  Fewer children mean more savings.  Also, the information put out by

Other developing or emerging countries that have high savings rates are Brazil, India and Vietnam.  What’s interesting is that these countries save such a high percent of their income despite having drastically lower incomes than other countries.

A Few Developed Countries Also Have High Savings Rates

There are a few developed countries that also have high saving rates.  Most notably, Switzerland, which saves in the range of 10-30% of its income, depending on which source you use.  Maybe that’s why they are the banking capital of the world.  High savings rates lead to high stability and a strong and durable government and economy.   Other notables are France, Germany, Belgium and Spain, which all save somewhere in the ballpark of 12 – 16%.  Note that when global economies turn sour, these countries seem to fair better than countries with low savings rates.

The United States Has One of the Lowest Savings Rates in the World

Did you know that the savings rates for the United States were actually negative for a while during the mid 2000s!  Low interest rates led many people to refinance their homes and actually take out more money on average than they saved.  Over the last few decades the savings rate of the US has been somewhere between 2-3% on average, however, according to some reports that rate has risen to 5% since the latest recession and financial crisis of 2009 began.  Decades ago, the US saving rate was around 10%, so it has somewhat steadily declined over the years.  It seems like it may be related to government.  After all, the government not only spends more than it earns, but it encourages people to spend by keeping interest rates low and by adding liquidity to the economy that makes getting loans and spending easier.

Other Countries With Low Savings Rates

Finland, Denmark and Norway have the three lowest savings rates of all countries.  In fact, in some studies, all three of them have had negative savings rates for years.  Other studies show that they have savings rates in the low single digits.  It seems that these low rates are likely a result of the type of governments.  These Nordic countries all have ultra high taxes and some of the largest entitlements of any country.  Because health care and retirement income are provided by the governments (to some extent), there maybe less reason for the people to save their money than in less developed countries where people must save for retirement and medical costs.

And then there’s Greece.  Although the data is very spotty on Greece, the data we found showed that they have had negative savings rates for years.  It’s no surprise that because of these savings rates and the extremely high level of entitlements, that Greece has been in the most trouble of all countries lately.

After reading this, do you have an opinion or explanation of why a particular country has a low or high savings rate?  If so, leave us your comments below.

{ 4 comments… read them below or add one }

Tulsa Oaklahoma apartment management December 5, 2011 at 6:24 am

That has been the trait for most of the chinese. They are known to save money for future use. It is very surprising to know that developing countries save more than developed ones… Strange isn’t it?

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Lesa December 26, 2011 at 11:34 am

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Mac February 1, 2012 at 2:53 pm

I think anytime people have suffered economically and then begin to prosper, they will save more money, like China. The USA had a higher savings rate after the depression. Our problem is that we have experience so much economic prosperity, that we forget that it can all be gone in a moment.
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GraySpirit February 5, 2012 at 7:40 pm

I think our generation grew up too easy and in the fast lane. My parents grew up in the Depression era and have a different attitude about savings that I do. In my travels through Asia, it is remarkable to see Chinese doing well in business in many countries – probably due to this ability to save and make the right investments at the right time.

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