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This series of savings certificates pays 6% interest.

This series of savings certificates pays 6% interest.

The old series pays 6% interest with higher Euribor and retention premium. With the European Central Bank set to cut interest rates in 2024, experts advise investing in long-term deposits to get current interest rates before the cuts.

There is an old series of savings certificates (CA) that pay a total interest rate of 6%. Series C rewards savers with 6%, given that the Euribor is 3.9% and the retention premium after 10 years is 2.5%.

“If you have an old air conditioner, it's worth keeping. If you have to salvage it, avoid the old chain,” Antonio Ribeiro, of Deco Prosti, told JE.

Analyzing the 6% Series C, he notes that it is “one of the few guaranteed capital products that has currently managed to outpace inflation,” highlighting the Bank of Portugal’s 2024 inflation rate forecast of 3.6%.

Compared to the interest paid on bank deposits, this series pays higher than expected inflation. “In terms of net worth, no deposit can beat inflation in 2024.”

In the other series, in D, the interest rate is about 4.5%, and in E, which ended in June, the prime rate ranges between 3.5% and 4.0%, depending on the subscription date.

Regarding the end of the previous Series E, “Since June, the amounts invested in CAs have decreased every month,” he points out that the amount invested in deposits has been rising since then.

“People are betting on deposits again. The end of Series E helped the bank remove this product that people were using,” he adds.

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At this moment, “there are no more interesting products except deposits.”

But with the European Central Bank likely to start cutting interest rates in 2024, which will have an immediate impact on deposit interest rates, this expert advises consumers to invest in deposits with longer maturities to take advantage of higher interest rates.

“Interest rates have already peaked. Next year, the ECB will start to fall. Interest rates will start to fall and deposits will be cut immediately. The advice to anyone who has to make deposits now is to bet on a longer period, a year or two, Before the declines start.

Is it worth betting on CA right now?

In the current series, F, the country pays a maximum interest of 2.5%, and analysts believe it is better to invest in term deposits.

“At the moment, it seems to me that the best option is to offer one-year deposits in the bank, and there are offers of more than 3%,” said Felipe Silva of the International Monetary Fund -In Informação de Mercados Financeiros.

In turn, economist João Moreira Rato points out that banks are able to compete in order to store liquidity. There was a major adjustment by the banks, and it took some time to adjust interest rates, but they did.

“There is a lot of supply, there are a hundred deposits with a rate equal to or higher than CA,” notes Antonio Ribeiro of Deco Propste. “At the moment, those who want to invest in the short and medium term can already find interest rates equal or higher.

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There is a dissenting opinion by Ricardo Cabral of ISEG who sees CA as more attractive, “especially if interest rates start to fall.”

The amount invested by families in California fell in November to €34.06 billion, the first drop in three years (nearly eight billion euros), according to the latest data from the Bank of Portugal (BdP).

It must be remembered that in June the government made a controversial decision to reduce the maximum interest rate from 3.5% to 2.5%, as many considered the reduction to be in favor of banks that were still recording very low interest rates on deposits.

In the previous months, there was a real race as monthly subscriptions reached 2.3 billion euros.

The bill with interest on savings and treasury certificates rose by 65% ​​to 1 billion euros by October. This value exceeds the amount expected by the government for 2023: 950 million euros.