To Örebro University

Background and purpose: Today's focus on household ways to save and invest in Sweden has attracted our interest to study households' choice of savings vehicles. The study aims to identify and describe various household patterns of behavior regarding choice of investment products. As the new Investeringssparkonto is designed to increase households' investment in financial instruments, we wanted to examine the extent to which lower taxes and simpler labeling could be incentives to encourage investments by households.

Method: To fulfill our purpose we chose to use a qualitative method which enabled us to estimate what households' choice of investment products looked like and which factors influenced the choice. Our primary data is collected through interviews with three bank officials. Secondary data consists of already existing research and government statistics.

Conclusions: In our study, we have concluded that the choice of savings vehicles is mainly influenced by risk appetite, investment horizon, return, economic situation, tax laws and the media's angle. Low taxes and simplified declaration has not had as much impact as other factors in regard to financial instruments, but can be seen as incentives to stimulate investments by households. Knowledge about financial instruments, among the households, is an important element for understanding that lower taxes and simpler labeling are major benefits of the ISK.