Since last August, it was already difficult for investors to secure a return of 3%, but now reaching 2.50% is also difficult for them. 12-month Treasury bills are already trading below this level on the secondary market (where securities are bought and sold once issued): they rose this Thursday to 2.48%, the highest interest rate low since December 2022.
The panorama of returns that the most prudent profiles can pocket has changed a lot, those who invest the most in Letters, who for many months (almost the whole of 2023 and until August 2024) benefited from guaranteed returns of 3 % or more with 12-month Treasury securities. We must not forget that a little over a year ago, In September 2023, investors gained 3.93% for lending their money to the Kingdom of Spain for only one year (for a decade they only earned a little more, 4%). But the returns to which these profiles had become accustomed are over. If they want to recover them, they will have to turn to other products, such as deposits or fixed income funds (even if the latter option implies taking more risks and therefore changing the investor profile).
This downward trend in yields which is reflected in the secondary market is the same as that observed during the auctions organized each month by the Treasury. Indeed, since last June, investors who have had to renew their letters have done so, systematically, at rates lower than those from which they previously benefited. It is true that during the last auction, on November 5, profitability increased for the first time in 8 months (up to 2.61%), after months of sharp decline. But the prevailing trend is that the interest the state will have to pay in the auctions continues to decline and that renewing the bills at higher rates is a mission impossible.
This movement, and that reflected in the secondary, is in line with the trajectory of rate cuts that the European Central Bank (ECB) began in June, and which will continue in the months to come, pulling yields down. The market expects almost six more drops in the price of silver between now and October 202525 basis points each.
The investor who wants to continue in Spanish public debt you can still get 3%, but in exchange for lending their money for a much longer period to the Kingdom of Spain. The yield on the 10-year Spanish bond is currently 3.08% on the secondary market. This profitability has declined in recent months; It reached 3.46 in early July and has been falling ever since. And after losing 3% for much of October, it has overcome this psychological barrier again.
More profitable 12-month deposits
On the other hand, for savers who need to renew their letters, in Spain, a good handful of 12-month deposits are for sale which exceed the profitability of the letters. Cetelem stands out -the division of personal credit products of BNP Paribas-, which has increased its remuneration in recent weeks up to 3.24% (in a context where most banks are lowering interest rates). For its part, Banco Finantia maintains its 1-year deposit at 3%, while Pibank reduced it from 3.03% to 2.83%, still exceeding the yield on Letters.
Last week, EBN revolutionized the sector by launching a combined deposit which offers 3.55% for 12 months. But this is not a typical deposit, since it requires a link to investment funds or managed portfolios. This 3.55% also implies a contribution of at least 60,000 euros; For amounts from 20,000 euros, the APR is 3.25%.
