Portuguese Households Have Never Held More Money in the Bank, but Term Deposits Just Shrank for the First Time in a Year

Portuguese households have never had more money sitting in a bank account than they did at the end of July. They also, for the first time in almost a year, had slightly less of it locked into fixed-term products. Bank of Portugal figures released on Thursday put total household deposits above €206.7 billion, an all-time high, while the stock of depósitos a prazo (term deposits) fell by €21.5 million to €116.4 billion.

The fall itself is trivial in size: on a €116 billion base, €21.5 million is a rounding error. What makes it notable is the direction. Term deposits had risen every single month since August 2025. The all-time high in the headline number was carried entirely by depósitos à ordem (sight or current accounts), which absorbed everything the term products did not.

A percentage point is doing the work

The competing product is not another bank. In July, Certificados de Aforro (savings certificates) took in €767.7 million, the largest monthly intake in three years, in a month that also saw a new series of Certificados do Tesouro (treasury certificates) launch on improved terms. The pull is arithmetic rather than sentiment. Term deposits in Portugal pay an average of roughly 1.5 percent. Savings certificates are close to 2.5 percent, a gap of about a full percentage point, and that gap has widened as the Euribor has climbed through the summer.

Readers who have followed the series will recognise the pattern. The August base rate on savings certificates was set at 2.474 percent, the state's Série F is indexed to the three-month Euribor, and the outstanding stock crossed €42.4 billion at the end of May on a run of consecutive monthly increases. The IGCP also removed the €5,000 ceiling on single online subscriptions in July, which made the switch a two-minute job rather than a counter visit. Banks, meanwhile, reprice term deposits slowly and on their own schedule, because they are not short of funding while current-account balances keep growing.

Term deposits still account for about 56 percent of what Portuguese households hold at banks, so a single month's dip changes nothing structural. It does, however, put a date on something the Bank of Portugal has been describing for a while: that nearly half of Portuguese household financial wealth sits in low-yield deposits, and that savers are slow to move even when the alternative is state-guaranteed and pays more.

What This Means for Expats

• Check what your term deposit is actually paying. The 1.5 percent average hides a wide spread. Renewal offers on maturing deposits are frequently below the rate you originally signed, and they roll over automatically unless you say otherwise.
• Savings certificates are open to residents, not just citizens. Subscription runs through the CTT post office or the Aforro Net portal and needs a Portuguese tax number and a domestic bank account for the direct debit.
• The two products are guaranteed differently. Bank deposits are covered by the Fundo de Garantia de Depósitos up to €100,000 per depositor per bank. Savings certificates are a direct claim on the Portuguese state, with no ceiling and no fund in between.
• Tax treatment is the same either way. Interest on both is taxed at the 28 percent liberatory rate, withheld at source, so the headline gap is also the after-tax gap.
• Liquidity is not the same either way. Savings certificates cannot be redeemed in the first three months and pay quarterly interest thereafter; breaking a term deposit early usually costs you accrued interest rather than capital.

The next monthly reading will show whether July was noise or the start of a rotation. The tell to watch is the sight-deposit balance: as long as households keep parking record sums in accounts paying close to nothing, the story is not really about term deposits losing to certificates. It is about a large share of Portuguese savings staying deliberately, expensively liquid.