Portuguese Savers See First Deposit Rate Rise Since 2023

A flicker of movement has finally appeared in Portugal’s long-dormant savings market. After nearly two years of steady erosion, the average rate paid on new term deposits climbed in October, a change so slight—0.03 percentage points—that it might have passed unnoticed were it not the first positive reading since December 2023. Yet for families watching inflation nibble away at their nest eggs, even a modest rise to 1.37 % feels significant.

A modest uptick that breaks a 22-month slide

The Banco de Portugal confirmed that the average remuneration on new retail term deposits edged higher from 1.34 % in September to 1.37 % in October. Although the move is only three basis points, it interrupts a sequence of declining or flat readings stretching back to January 2024, when banks began trimming offers after the rate peak of 3.08 % logged in December 2023. In cash terms, households placed an additional €613 M into depósitos a prazo during the month, the first sizable gain since late summer.

Why banks moved despite Frankfurt standing still

The European Central Bank has held its main policy rates unchanged for three consecutive meetings, leaving the deposit facility at 2 %. That stasis should in theory cap retail deposit rates. However, several forces nudged Portuguese banks to sweeten offers. They face stronger competition from state-backed certificados de aforro, currently yielding just over 2 %. They also need to shore up liquidity ahead of the year-end balance-sheet audit cycle. By boosting rates a fraction, lenders signal that they will not cede savers entirely to government paper or money-market funds, even if the overall stance in Frankfurt remains cautious.

How Portuguese savers are reacting

Fresh data show households shifting money away from demand accounts and toward higher-yielding products. The stock of sight deposits shrank by €79 M in October, while term balances grew by €477 M. At the macro level, the household savings rate is ticking up—12.6 % of disposable income in the second quarter—yet Portugal still trails the euro-area average by almost three percentage points. Financial advisers note that a rise measured in basis points will not, on its own, reverse the migration toward investment funds and premium bonds that gathered speed through 2024.

Still a European laggard

Even after October’s lift, Portugal remains in the lower half of the euro-area league table. The bloc’s average rate on new term deposits sits at 1.81 %, with Spain near 1.75 % and Germany above 2 %. Only four member states pay less than Portuguese institutions. That spread reflects not just differing funding needs but also the relative pricing power of banks in smaller markets, where customer switching is rarer and branch networks retain loyalty.

What analysts anticipate for 2026

Market economists caution that October’s nudge higher may not herald a steady climb. Consensus projections see 3-month Euribor settling near 2 % in 2026, suggesting deposit rates could drift sideways or dip if inflation cools. Still, several analysts argue that Portuguese banks have room to raise offers further without compromising margins, given that loan books reprice faster than deposits. The decisive variable remains the ECB’s next move: a single cut in policy rates could freeze the current momentum.

Practical implications for households

For savers, the headline is simple yet sobering: even after the increase, term deposits lag both inflation expectations and risk-free alternatives. Households looking for a fully guaranteed return may welcome the adjustment, but those seeking to preserve purchasing power are likely to continue diversifying. As one senior strategist in Lisbon put it, “A 1.37 % coupon is better than 1.34 %, but it will not change the household balance-sheet story on its own.”