Savers in Portugal Earn Less Than the Euro Area Average on Every Kind of Bank Deposit, Even After a Seventh Monthly Rise in Rates

Portuguese banks paid an average of 1.63 percent on new term deposits from households in August, one of the lowest rates in the euro area, according to figures and an analysis published by the Bank of Portugal on Thursday. Only Bulgaria, Cyprus, Greece, Slovenia and Croatia paid less. The euro area average was 2.18 percent, 0.55 percentage points higher.

Rates are moving up, slowly. August was the seventh monthly rise in a row, from 1.59 percent in July and 1.34 percent a year earlier, taking the average to its highest since April 2025, when it stood at 1.64 percent. The rate on new term deposits had fallen without a break from 2.91 percent in January 2024 to 1.39 percent in August 2025. With the latest rise, Portugal moved up one place and now has the sixth lowest rate in the euro area.

Lower on every kind of account

The gap is not limited to new deposits. On all the money already held, the central bank says, savers in Portugal earned less than the euro area average on every type of account in August:

• term deposits: 1.11 percent, against 1.93 percent in the euro area;
• deposits with notice: 0.24 percent, against 1.28 percent;
• current (overnight) accounts: 0.04 percent, against 0.29 percent.

"The data show that, on average, depositors in Portugal receive lower interest than in the euro area in all types of deposit," the bank said. It adds that the overall return depends on how savings are spread, and here Portuguese households do better: 55 percent of their deposits sit in term accounts, the highest share in the euro area. Because term deposits pay more than the other kinds, the average return on all household deposits in Portugal is close to the euro area median.

Loans moved faster than savings

The analysis also looks at how the last rate cycle was passed on. When interest rates began rising in 2022, banks passed the increase on to loans more quickly than to deposits, widening the gap between what they charge and what they pay. And although deposit rates have risen, inflation stayed above them for much of the period, eroding the purchasing power of money left in the bank. With consumer prices up 3.6 percent in the year to September, according to INE's flash estimate, a 1.63 percent deposit still loses value in real terms.

Household deposits are unusually important to Portuguese banks. In August they made up 41 percent of the banks' liabilities, almost double the euro area average of 22 percent and the sixth highest share among euro area countries.

Short terms, big sums

Households put 12.727 billion euros into new term deposits in August, 977 million less than in July, when new deposits reached a record. Almost all of it, 94 percent, went into deposits of up to one year. Companies were paid an average of 1.97 percent on new term deposits, 0.01 points less than in July.

For savers, the figures are a reminder to compare. Rates on new deposits vary from bank to bank, and state savings products are an alternative: our guide explains how to buy savings certificates (Certificados de Aforro). Borrowers, meanwhile, face the other side of the same rate cycle, with mortgage payments rising this month.