Portuguese Savers Flood Government Savings Bonds With €404 Million in July

For anyone juggling euros between a local bank account and their next bottle of Alentejo red, one statistic leaped off the Bank of Portugal’s spreadsheets this summer: households poured an additional €404 M into the State’s retail bonds—Certificados de Aforro—in July alone, pushing the outstanding total to €38.22 B, a summit unseen since the 1990s. The quiet migration of savings from low-yield deposits to these government IOUs is reshaping both personal finance strategies and the Treasury’s funding playbook.

Why Portuguese savers are flocking to government bonds again

After a bruising bout of inflation and a rapid rise in European interest rates, families in Portugal started hunting for havens that beat the anaemic returns on term deposits. Series F of the Certificados—the only tranche open for new money since mid-2023—offered a headline rate of 2.011 % in July. That looks modest until you notice that the average rate on fresh one-year bank deposits slipped to 1.43 % in June. Add the certificates’ capital guarantee and the ability to redeem after three months, and the product suddenly feels like a souped-up savings account backed by the Republic itself.

Understanding Certificados de Aforro: a crash course for newcomers

Think of these instruments as Portugal’s answer to U.S. Savings Bonds. Issued by the debt agency IGCP, they can be purchased in post offices or online, in chunks as small as €100. Holders earn a quarterly-paid, tax-withheld coupon that floats with the 3-month Euribor—capped at 2.5 % for the current series—but sweetened by loyalty bonuses that climb to 1.75 % in the final years of the 15-year lifespan. Foreign residents with a Portuguese tax number (NIF) are free to subscribe, and interest is taxed at a flat 28 % unless you opt into Portugal’s progressive rates. That simplicity—no brokerage, no market swings—has turned the product into a popular first stop for immigrants assembling a local emergency fund.

The July surge by the numbers

July’s €404 M net inflow marked the tenth consecutive monthly increase, catapulting the total stock to a record that predates the euro itself. On a year-over-year basis, savers added €4.28 B—a hefty 12.6 % jump. The ramp-up was broad-based: postal counters across the country reported lines in the days after pay slips landed with the summer vacation allowance, and the online platform aforro.gov.pt logged its busiest fortnight since launch, according to IGCP officials. By contrast, Treasury Certificates—the longer-term cousin once favored by retail investors—continued to bleed assets for the seventh straight month.

What is driving demand despite falling rates?

Paradoxically, the crowd arrived just as the coupon was drifting lower. Analysts point to three overlapping triggers. First, even a softening Series F rate still beats most bank offers, so switching costs are minimal. Second, July coincides with the annual holiday bonus for employees, flooding accounts with surplus cash that many prefer to park rather than spend amid lingering economic uncertainty. Finally, the certificates’ risk-free aura looks attractive after a roller-coaster year in global equities and crypto, especially for older savers scarred by past crises.

Implications for Portugal’s public finances

Lisbon’s Finance Ministry, in its 2025 budget blueprint, pencilled in €5.97 B of new retail bond issuance—more than double last year’s tally—precisely because it foresaw this retail appetite. While the inflows give the Treasury a cheap, sticky funding base, they also force planners to juggle maturities: every euro raised through certificates is a euro not raised via syndicated bond deals, chipping away at secondary-market liquidity. The IGCP chairman has warned that the 2023 frenzy "disrupted our auction calendar," a headache officials hope to soothe by relaunching floating-rate retail notes (OTRV) indexed to six-month Euribor.

Should foreign residents consider Series F?

For expatriates weighing whether to join the rush, two practical questions arise: access and taxation. Access is easy—any resident with a NIF can subscribe at a CTT counter or through the online portal using a Portuguese IBAN. Taxation is less straightforward: the flat 28 % continues to apply even if you benefit from the NHR regime, though you may offset it under certain double-tax treaties. Liquidity is another consideration. Although early redemption is allowed after three months, you forfeit the loyalty bonuses and one interest cycle. In short, certificates work best as a medium-term parking spot for funds you can spare for at least a year.

Looking ahead: will the party last?

Euribor futures suggest short-term rates could inch up again this autumn, which would nudge the Series F coupon back above 2.0 % after August’s dip below that line. Yet the Finance Ministry has made it clear that a fresh series with a higher cap is not on the table for now. If bank deposit rates finally respond to ECB cuts and climb toward certificates’ territory, the current momentum could slow—but for the moment, the State remains Portugal’s most popular banker.