According to information from the Bank of Portugal, Portuguese citizens have deposited more money than at any time in the past 21 years. In July, the amount of new deposits reached €12.559 billion, double what it was in the same month last year. This is the highest level recorded since tracking began in 2003.
Despite a slight drop in the average interest rate on new deposits in July — down to 2.63% — savers were not deterred. The main reason for this surge in deposits was the reinvestment of funds that had matured in July. This was largely driven by a lack of alternative investment options that offered both high returns and capital guarantees.
Among Eurozone countries, Portugal now ranks fifth for offering some of the lowest interest rates on deposits. For deposits of up to one year, the average interest rate was 2.65%, attracting 97% of new deposits. While interest rates for deposits of 1-2 years have decreased, investments for periods longer than two years rose to 1.97%.
Conclusion:
While Portuguese savers are breaking records with their deposits, low interest rates may not be enough to protect their savings from inflation. The lack of high-yield, secure alternatives leaves many savers vulnerable to losing purchasing power. Don’t let banks park your money where it can’t even keep up with inflation. Consider exploring other options that can better protect and grow your wealth!
