The best deposits to ‘shield’ yourself from a rate cut by the ECB

The increase in interest rates, which began in July 2022, has remained stagnant since last October 25 and with the expectation that the first cycle of reductions will take place in 2024. Given this possibility, some entities have already begun To cut the returns they offer on their deposits, especially in the longer term. With this possibility on the horizon, the best strategy that the most conservative saver could adopt is to deposit their money in longer-term deposits, which will offer the best returns.

In this way, the best returns will be ensured before expectations of a cut in the official price of money by the ECB leads to a drop in the remunerations offered by deposits in their fixed-term deposits. In this way they will be able to get the most out of it.

Better alternatives, according to Raisin

From the European savings platform Raisin, the deposit offers that still maintain the interest rate offered close to the ECB stand out. Among the best alternatives is the one-year deposit from the Italian bank Banca Sistema with a remuneration of 4.3% TIN/APR. Contracting imports are 20,000 euros as a minimum import and 100,000 as a maximum import. The opening is carried out 100% online, without the need for additional documents. Regarding tax withholding, in Italy it is not carried out for non-residents in the country.

The second entity that pays the most for savings is the Portuguese bank BAI. It offers a remuneration of 4.2% TIN/APR and its minimum contract amount is 10,000 euros, the maximum amount is also 100,000 euros. The opening takes place 100% online. The standard withholding of interest generated by deposits in Portugal is 28%, which could be reduced to 15% if clients present a Certificate of Tax Residence with agreement for Portugal issued by the Tax Agency and the completed Form 21-RFI and signed. up to 4 weeks before the due date.

Banca Progetto, also from Italy, is another of the banks that maintains profitability above 4%. Specifically, it markets its products with a remuneration of 4.2% TIN/APR, its minimum contract import is 10,000 euros and the maximum import is 100,000 euros. The characteristics of the Banca Progretto deposit in relation to contracting and tax withholding are the same as those of Banca Sistema, 100% online and absence of tax withholding for non-residents.

Finally, we must highlight the Portuguese entity Haitong, which offers a deposit at a 12-month fixed interest rate with a profitability of 4.10% TIN/APR. Hiring it does not entail any additional cost; it requires a minimum import of 10,000 euros and a maximum of 100,000 euros. In reference to tax withholding, by having a branch in Spain, the standard Spanish withholding of 19% is applied.

Long term offer

As for long-term deposits, a selection of the best two-year deposits can be contracted through the Raisin platform. Firstly, there is Banca Sistema, which offers a profitability of 4.26% APR (4.35% TIN). The contracting characteristics and tax withholding are the same as in the entity’s one-year deposit.

Raisin also highlights Haitong’s two-year deposit, with a return of 4.22% APR (4.25% TIN); and the two-year deposit from the Italian entity Banca Progetto, with a 4.17% APR (4.20% TIN) profitability. The requirements for both long-term deposits, in terms of tax withholding and the required contribution, are the same as for the one-year deposits of both entities.