Government to create free digital savings accounts

Government to create free digital savings accounts
Photo: Beto Chagas/Shutterstock

President Jair Bolsonaro issued a presidential decree on Saturday, allowing the automatic creation of digital savings accounts to facilitate the payment of the Formal Workers’ Mandatory Severance Fund (FGTS).

These digital savings accounts will integrate FGTS payments as well as the BRL600 emergency salary, on the same account without the need to go out and open an account at a physical branch. Users will be able to transfer, withdraw, and deposit up to BRL 5,000 (USD 990.24) per month on their digital savings account without charges.

Caixa, the largest government-owned bank in Latin America, will begin unemployment fund payments on June 29, with payments scheduled according to recipients’ birth month. 

As previously reported by The Brazilian Report, unemployment claims have soared in Brazil since the beginning of the crisis, with over 960,000 new claims made in May alone, bringing the total to 3.3 million for 2020. Yet, the real unemployment figures could be much worse as informal jobs lost during the Covid-19 pandemic are not included in the official data. The latest unemployment figures indicate that over 5 million jobs have been lost since the start of the pandemic.

The increased vulnerability of informal workers during the Covid-19 pandemic has prompted the Economy Minister Paulo Guedes to consider redesigning Bolsa Família, Brazil’s biggest cash-transfer program, to include informal workers.

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