Housing savings banks are credit institutions that raise funds (savings) from individuals and legal entities with the aim of lending them to these same individuals in the form of favorable housing loans after the statutory deadline.
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The term credit institution is specific to European Union law. Croatia is in the process of aligning its legislation with the European Union, so it has implemented the notion of a credit institution in Croatian regulation.
The term credit institution means a legal person whose organized activity is to raise funds from natural and legal persons and channel the funds thus collected into loans for its own account.
There are three types of credit institutions in Croatia: banks, savings banks and housing savings banks.
Basic about housing savings
Housing savings means raising funds from savers for the purpose of resolving their housing issue and granting housing loans with the financial support of the Republic of Croatia.
The Housing Savings Agreement can be concluded by Croatian nationals and natural persons residing in Croatia, and the approved loan funds can be used only in the territory of our country.
Savings are usually contracted for five years. The depositor is obliged to pay the contracted amount, ie the savings deposit, regularly and in accordance with the agreed dynamics.
Although at the end of the contractual savings period, the depositor has no obligation to borrow, the housing savings account is a term purpose deposit.
State incentive funds make housing savings attractive?
The purpose of housing savings is to realize a favorable housing loan to address the social status of young people. That is why in most countries, and until recently in our country, Governments are stimulating housing savings by paying out state incentives (DPS).
The DPS is calculated by increasing the average interest rate on newly contracted foreign currency household deposits with credit institutions over a period of 1 to 2 years by half the average yield on five-year government bonds.
By October 31, the Ministry of Finance prescribes a percentage of government incentives for the following year. The state incentive funds for 2015 will be 4.90% on the deposited savings deposit, but a maximum of HRK 245.00 per annum per depositor for the current calendar year.
DPS for housing savings collected in 2016 will amount to 4.10%, with a maximum of HRK 205.00 per housing saver during the calendar year.
Savings deposit represents the total amount paid into housing savings less the amount of fees paid by the savings bank during one calendar year.
DPS are repaid at the same interest rate as the savings deposit.
Payment of DPS
If the contractual savings period is less than five years, the housing saver is entitled to a DPS only in case of purposeful use of the saved funds, ie if he / she requests a home loan. If the savings time is five years or longer, the depositor is entitled to the payment of the DPS and the associated interest, regardless of the purpose of using the savings.
The amount of DPS per depositor is defined by the Government. Since 1998, when the DPS entered into force, until 2015, the maximum annual amount of DPS has been repeatedly reduced.