In January, the average interest rate on new time deposits from individuals increased to 0.56% (0.35% in December), the highest rise in 11 years, advanced this Friday by the Bank of Portugal. Banks have been improving the offer of deposits, albeit occasionally, and with various limitations regarding amounts or other conditions.
With the rise seen at the beginning of the year, “Portugal is no longer the country in the euro area with the lowest interest rate on new deposits, but remains below average (1.64% in January)”, says the supervisor.
In practice, Portugal advanced to the fourth position, above Croatia, Cyprus and Greece.
In addition to being very far from the euro zone average, it is even further from the averages of France (2.37%), Italy (2.12%) or even Germany (1.75%).
The average interest rate on deposits in Portugal was particularly influenced by new deposits with a maturity of one to two years, which were remunerated at an average interest rate of 1.13% (1% in December), corresponding to 19% of the amount of new deposits in January (8% in December).
The amount of new term deposits was 5,727 million euros, slightly above the 5,156 million in December).
The slight rise in new deposits takes place in the same month as the biggest drop in bank deposits since 1979: the stock of deposits by individuals in resident banks decreased by 2.5 billion euros compared to December 2022, totaling 179.9 billion euros at the end of the month according to data released by the BdP, which is keen to point out that it is “the largest reduction of private deposits since the beginning of the statistical series”.
The withdrawal of old deposits is explained by the increase in subscriptions to Savings Certificates and, certainly, by the increase in amortization of mortgage loans, as well as by the increase in the cost of living due to inflation.