For years, savings certificates were the choice of many Portuguese people to use their savings to earn some money, and they became particularly profitable when interest rates began to skyrocket, around two years ago.
The rise in rates also had an impact on deposits, but to a much lesser extent. Therefore, many families took the money they had in installments and put it in certificates, the State’s main savings product.
Until the middle of last year, when Euribor rates continued to rise significantly and there was a rush for savings certificates, they already represented around 30% of the new debt issued by the State.
The Government, still from the PS, decided to lower the maximum profitability associated with certificates, going from a maximum of 3.5% to 2.5% in new subscriptions, which means lower gains for those who invest.
Since then, deposits have regained strength. With interest rates rising, several banks were already paying more than the savings certificates. And in March of this year, deposits made the biggest jump since December 2022. Last month, banks accounted for more than 182 billion euros from families.
The fee varies from bank to bank. On average, at the moment, it is 2.8% for new term deposits, but it is on a downward trend.
Banks have already started to anticipate the European Central Bank’s interest rate cut, which should take place in June. And this is being reflected in lower rates and lower profitability on deposits, which could make savings certificates more attractive again.
In March, according to the Bank of Portugal, there were already five billion euros more in certificates than a year ago.
Stay bonuses are an advantage
Although they are also indexed to Eurbior, certificates have an advantage over deposits: retention premiums.
From the first year onwards, they add extra interest to the normal rate. In other words, the longer you hold the certificates, the more you can earn. Furthermore, it is free of commissions, unlike what happens in most banks.
Tags: Savings certificates attractive
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