The 37 deposits that pay more than inflation

There are approximately 400 term deposits available for families to invest their savings, but few (less than 10%) offer an interest rate higher than 3.58% of inflation. Get to know them

Deposits are the preferred financial product of the Portuguese. According to another Data According to the Bank of Portugal on household wealth creation, more than 49% of their financial assets are allocated to deposits.

On the occasion of World Savings Day, which falls on Tuesday, the Economic Cooperation Organization scanned the entire national market to find deposits with the highest interest rates. We reviewed the price lists of 28 banks and financial institutions licensed by the Bank of Portugal to operate in the national market and analyzed the consolidated information sheet (Fin) of 396 term deposits.

The conclusions are not great for families’ wallets. Although the current market supply is broad, only 37 deposits (less than 10% of the total) are currently paying above the annual inflation rate, which in September stood at 3.58%. second Data from the National Institute of Statistics (INE). Worse still: if we take into account the 28% tax on the interest generated, there is only one deposit left capable of protecting Portuguese savings from the devastating impact of inflation, namely a payment of 5% or more.

However, even this “needle in the haystack”, which is Marketing it By Bankinter With its “BK Mini Term Deposit”, it is not for all clients and is unlikely to make a big difference to any saver’s portfolio: in addition to being only available to children under 18, it only allows investments between 100 and 1,000 euros.

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In the list of deposits with the highest interest rates, the offer presented by small and medium banks stands out. For risk-averse customers, the size of banks or even the fact that many of them do not even have a physical branch may be a cause for concern. But it doesn’t have to be so. For more than 30 years, bank deposits have been… content From the Deposit Guarantee Fund. This mechanism currently guarantees the recovery of all deposits in each credit institution up to a maximum of 100 thousand euros per depositor.

Although the safety of your savings shouldn’t be an issue, finding a deposit worth your life’s savings should be. Data collected by the Economic Cooperation Organization shows that most banks still pay very poorly for the savings of the Portuguese people. Indeed, many deposits are still at zero interest rates, even though the European Central Bank has raised interest rates in the past 15 months by 450 basis points and set the deposit rate at 4%.

“Some banks also have the peculiarity of classifying their customers, providing time deposits oriented according to some of their characteristics. However, contrary to what one would expect, this differentiation is never aimed at benefiting them.”

The current supply of term deposits also reveals that, in addition to the interest rate offered by the vast majority of term deposits not covering the loss of purchasing power resulting from the inflationary effect, national banks still appear much less benevolent than their European counterparts.

According to another Data From the Bank of Portugal, the average interest rate on new deposits of up to one year in Portugal was 1.75% in August. In the same period, in August, euro zone banks rewarded their customers’ savings with an average interest rate of 3.01%, according to European Central Bank data. Data From the European Central Bank – For longer saving terms, the difference between Portugal and the eurozone average remains, although less pronounced.

It is true that there are improvements on the part of Portuguese banks in this regard, which over the past 12 months have sought to increase interest rates on deposits, but this has not been a sufficient effort. Between August 2022 and August this year, the interest rate on deposits of up to one year in Portugal rose by about 1.74 percentage points, but in the euro area, the bonuses on these same deposits increased by 2.52 percentage points, or about 1.5 percentage points. More times, according to European Central Bank data.

This dynamic means that Portugal has left the top three among countries with the lowest deposit pay rates, where it was almost a year ago, ahead of only Irish and Slovenian banks. However, currently, Portuguese banks occupy fifth place in the rating of the worst payers of household savings.

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Differentiated impact on customer differentiation

With deposits being the preferred and most understood financial product of the Portuguese for decades, it is not surprising that banks are increasingly resorting to promotional campaigns around these products to attract new customers, and offering interest rates on these deposits as well. Above average commercial offer.

Based on this purpose, deposits are generated and spread to new customers and/or new resources in the market, as is the case with “super deposit”. 3 that it 6 Most famously, from Banco Big, “New customer deposit“, from Banco Best, or”Welcome to Net Deposits”, from Bankinter, which currently allows its new customers to invest their savings in term deposits with interest rates of 4% or more.

The problem arises after the expiration of this period, when the status of the “new customer” changes to the “regular customer”, so that there is a gap between the interest rate on the welcome deposit, which is non-renewable, and the rest of the benefits. menu. This is the case of Banco Best which, after paying 4% for a 6-month welcome deposit, is limited to paying up to 0.5% for a 6-month term deposit, according to information from its bank. Risky.

This situation is common in almost all banks and therefore serves as a warning to families to be concerned and be sure to consult the market regularly in search of the best options for their money, but especially when the term deposit is close to winning. If you find a better solution elsewhere, you can always change the bank. No one is stopping you and your savings will thank you.

Some banks also have the peculiarity of classifying their clients, providing term deposits oriented according to some of their characteristics. However, contrary to what one might expect, this differentiation will never benefit them.

“In the world of term deposits, standing still and waiting for interest to hit your account is not the most appropriate path. Eliminating some of the competition in the market, especially from smaller banks, and taking advantage of promotional deposits proves to be the most effective strategy for finding the best deposits.”

For example, Caixa Geral de Depositos Offers Non-reloadable term deposit for 6 months for all customers at an interest rate of 3.5%. If customers wish to continue investing their 6-month savings in a term deposit, they will have to invest the money through “Caixa Bubansa“, a deposit for 6 months with an interest of 0.1%. But if they retire and receive a pension of up to three times the minimum wage, they can invest their savings in “Caixa Popanca, retired“Which pays 0.005%. On an investment of 10 thousand euros, while a term deposit intended for retirees gives a net interest of 0.21 euros, a deposit for the same period for all clients, retired or not, generates a net interest of 4.1 euros, that is, about 20 times more.” .

The same thing happens in Crédito Agrícola with “CA Molhir”, a term deposit for 3, 6, 12 and 24 months, renewable, paying between 0.15% and 0.35% for savings made by women. However, with the same savings conditions, Crédito Agrícola has revolving deposits of the same amount that pay much more, regardless Regardless of the client’s 6th, an example is the “Regular Term Deposit” which pays between 0.15% and 1.25%, or the “DP Net Term Deposit” which for orders lasting 1, 3, 6 and 12 months ranges between 1 and 75%. 5%.

In the world of term deposits, standing still and waiting for interest to hit the account is never the best course of action. Eliminating some of the competition in the market, especially from smaller banks, and taking advantage of promotional deposits is the most effective strategy for finding the best deposits.

However, don’t expect to get rich. National banks, as European Central Bank data show, remain very reluctant to follow European banks in compensating household deposits.