After almost a decade of zero interest rates, where the supply of profitable deposits was almost non-existent, the returns on these products have revived with the tightening of monetary policy. It has not been so long since this process began, since it was in the summer of 2022 that the European Central Bank (ECB) raised interest rates in the eurozone for the first time in eleven years, and by consecutive movements. levels not seen in 20 years. Today, this trend is reversing again, with inflation increasingly under control and monetary policies return to the path of flexibility, with two drops of 25 basis points in Europe in recent months. And to the sound of these reductions, although a little slower than expected, the returns offered by the entities on their deposits are falling.
The products offered by twelve-month entities, among the most profitable, offered an average return of 3.18% at the end of 2023 on their one-year products. These yields were reduced to 2.79% on average, or 0.4 points lower than what they offered before the start of the downtrend (see chart).
Even if the drop in yields affected deposits, this drop was slower than was a priori anticipated. Actually, There are still three deposits offering a 3% return or more and three others which are greater than 2.80%. When yields reached their peaks, all entities offered forward products that exceeded 3% at one year, with the exception of Banco Pichincha and Triodos which offered rates of 2.75% and 2.6%.
The Italian BFF was the first to cross the 4% barrier, when the increase in profitability was the protagonist of deposits, with 4.06%. Until then, the old Farmafactoring offered 3.55% savings over 12 months for deposits of 5,000 euros or more. With this profitability of 3.55%, its offer was already the most competitive and it completely stood out from the others by crossing the 4% mark. After the last cuts, its yield drops to 2.78%, and the contractual conditions remain the same.
Focusing on what the entities now offer for their different products, Cetelem, the financial company of the French bank BNP Paribas, is the one that has the vehicle with superior performance, with 3.24%. In fact, this yield increased last week (previously it was 3.18%) with the launch of a new system in which they include quarterly settlement on their 12 and 24 month deposits. The entity will pay the interest generated in the associated account for these deposits every three months and will not require a minimum or maximum amount. Cetelem’s proceeds are attached to the Spanish Deposit Guarantee Fund (FGD), which guarantees the first 100,000 euros per depositor in the event of the entity’s bankruptcy.
Banco Finantia has the second most profitable one-year deposit, among the top 12, and currently offers 3.10%. In your case, the minimum amount to access this product is 50,000 euros, with a maximum of 500,000 euros. Pibank closes the top three entities that hold up with yields of 3% or more on their one-year vehicles, with 3.03%. To contract this product you do not need a minimum or maximum amount.
So, despite falling deposit yields, most of these vehicles offer higher yields than Treasury bills. In the last auction of twelve-month bills, the Bank of Spain granted 3,344 million euros, with requests for 5,375 million, at a marginal interest of 2.598%, lower than the previous 2.970% and placing it has the lowest level since December 2022. The average interest rate remained at 2.579%. Returns lower than all the most profitable bank deposits, except those of MyInvestor (with 2.5%) and Triodos, with another 2.5%.
“The market expects interest rates to continue to fall as inflation stabilizes. In fact, investors expect the ECB to cut by 25 basis points in each of its meetings until next March Therefore, the profitability of deposits will continue to gradually decrease over the next few months until it stabilizes around 2 and 2.5% by the middle of the year. next,” explains Joaquín Robles, market analyst.
The expert indicates that small savers who wish to continue to benefit from returns close to 3% per year “They must make their deposits before the end of the year and try to extend the maturity as much as possible, with the aim of ensuring this profitability in an environment of falling rates,” he recalls.
