Banque Centrale Populaire cuts interest rates by up to 90% on the basic offer of term deposits

Banks continue to show signs that they are preparing for interest rate cuts from the European Central Bank, reducing the payouts of their savings products. The Banque Centrale Populaire has already taken this step with regard to one-year term deposits, joining other financial institutions that are adjusting their offers. Now, the bank led by Miguel Maya has decided to reduce up to 90% of the remuneration it pays in the basic term application, which offers a variable and increasing rate, depending on the amount invested. From now on, he will pay everyone the minimum he has already paid.

The change in the price list, consulted by Jornal Económico (JE), shows that the so-called “standard time deposit” made available by the Banque Centrale Populaire has paid, so far, a total nominal annual interest rate (TANB) of between 0.25%, if an amount is applied Up to EUR 99,999.99, with a maximum of 2.5% on amounts exceeding EUR 1 million. Starting Tuesday, April 9, the date the new pricing comes into effect, the bank will start paying 0.25% regardless of the amount applied for a period that can range from 2 to 1,825 days.

“This deposit is not part of the offer essence Provided by the bank. It is a deposit that is not available for proactive subscription in the bank’s distribution channels, so this change in wages will not have any impact on the creation of new time deposits,” an official source of the Banque Centrale Populaire said. The bank has other term investments for the general public at higher interest rates.

However, this is not the first time that the bank led by Miguel Maya has adjusted interest rates on its savings products, especially those that it makes available through its website or mobile application. As JE wrote in January, the financial institution followed the same steps as other financial institutions, reducing the profitability of its one-year deposit, Net Millennium Flexível, with a minimum subscription of €250 and a maximum of €500,000.

At the same time, BPI also reduced the term to six months, from 3.5% to 3%. 12 months ago, it began offering interest at 2.5%, compared to the previous 3.5%, and there has been no change in interest on these products since then, according to an advisory on the bank’s website led by João Pedro Oliveira e Costa.

Caixa reinforces interest cuts

The same did not happen in the case of Caixa Geral de Depositos. At that time, the State Bank implemented a reduction in both deadlines, but then reduced them again. In January, the “Depósito Caixa 6 Months Non-Top-up”, with a minimum of 500 euros and a maximum of 500 thousand euros, now has a TANB of 3.350%, when an order was placed in the same product at the end of last year allowing customers to receive a total bonus of 3.50 %. It is possible to see on the website of the bank led by Paulo Macedo that this rate has fallen even further. It is now at 3%.

The same thing happened with Caixa's one-year deposit. With a minimum deposit of €5,000 and a maximum of €200,000, the Caixa 12-month Non-Reloadable Deposit offered a bonus rate of 2.950% in the initial period, rising to 1.500% in subsequent periods (after renewal). The bank decided to reduce the TANB ratio offered in the first year to 2,750%.

JE asked Novobanco and Santander whether they had made similar changes, but had not received any response at the time of writing.

These new adjustments to the rates that banks pay to customers are being made at a time when the market expects the European Central Bank to start cutting interest rates this summer. “In June, we will have a new set of forecasts that will be able to confirm whether the path we expected in March for inflation is still valid,” Christine Lagarde said at a meeting promoted by the Institute for Monetary and Financial Stability in March. The central bank president also said that if these statistics confirm the ECB's view, the monetary authority “could start the bearish phase of our cycle and make policy less restrictive.”