On June 27, many people will be happy about receiving a transfer from the Tax Office. This year, approximately NOK 31 billion will be paid and will be granted to approximately 2,8 million people. Means on average over NOK 11 per person!
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Is this a good way to save?
It is worth noting that there are, however, better ways to save than freezing your money in an account in the Tax Office. Although they are increased by interest, they only amount to 0,38%. The level of inflation in Norway fluctuates around 2% annually. Therefore, it is easy to calculate that as a result our tax overpayment, despite being increased by interest, loses its value.
There are better ways to save
Bearing in mind the above, it is even more important to ensure that there is no tax overpayment. A better solution is to deposit these funds, for example, in bank deposits, the interest rate of which reaches about 2% per annum. However, an even better solution are index funds, which provide earnings of up to 24% per year.
How does it look in practice?
Let's assume an overpayment tax amounted to NOK 30. After one year, the amount plus interest at 0,38% will be NOK 30. However, if you decide to invest these funds, e.g. in index funds, then after a year the sum will increase to NOK 100. From a mathematical point of view, this is a more advantageous solution.
