Bank Deposit Rates Lag Far Behind Treasury Certificates in Portugal

The average interest rate paid on bank deposits in Portugal came in at 1.48% in May, according to newly released data, remaining far below the return offered by the latest series of Certificados do Tesouro, the government’s retail savings product.

What the numbers show

Portuguese banks continue to offer relatively modest returns on standard savings and term deposits, even as the state’s own savings certificates keep paying noticeably more. This gap has been a persistent feature of the market as banks manage their funding costs while the Treasury uses certificates to attract household savings directly.

Separately, the total volume of new credit granted by banks held broadly steady compared with the previous month. Within that overall picture, housing loans showed a modest positive movement, suggesting mortgage lending has not weakened further for now.

Why this matters if you bank or save in Portugal

For foreign residents with savings parked in Portuguese current or deposit accounts, this data is a reminder that ordinary bank deposits are unlikely to keep pace with alternatives like Certificados do Tesouro, which are open to tax residents, including many expats, and are often marketed through the same banks.

Certificados do Tesouro have become popular in recent years precisely because they’ve paid more than typical deposit accounts, drawing household savings away from banks and toward the state. Anyone comparing where to keep euro savings locally should factor in this persistent yield gap when deciding between a simple deposit account and treasury-backed products.

What it means for borrowers

The steadiness in overall new lending, combined with a slight uptick in housing credit, points to a mortgage market that is neither sharply contracting nor rapidly expanding. For foreign residents shopping for a mortgage or considering refinancing, this suggests conditions have stabilised somewhat after the more volatile rate environment of recent years.

It’s worth remembering that both deposit and lending rates in Portugal are shaped by wider eurozone monetary policy, so further shifts in European Central Bank rates could move both figures in the months ahead. Anyone with savings or a mortgage locally should keep an eye on how these two trends—deposit returns and lending costs—continue to diverge or converge.