Deposit interest rate drops for sixth consecutive month to 2.66% in June – Interest rates

Since the beginning of the year, the average interest rate on new term deposits for individuals has been falling and stood at 2.66% in June, down from 2.72% in the previous month. Thus, the amount of new term deposit transactions for individuals fell by 545 million euros, totaling 10,061 million euros.

Data from the Bank of Portugal, released this morning, indicate that, despite this reduction, the amount of new operations remains high, similar to the last two months.This fact is largely the result of the reinvestment in new term deposits of amounts previously invested in deposits of this type, which reached maturity in June without automatic renewal”, explains the note released this Wednesday, July 31.

The highest average return was recorded on new deposits with a term of up to one year – 96% of the total new deposits in the last month -, where the interest was 2.68%. On term deposits of one to two years, the rate was 2.22, an increase of 0.06 percentage points (pp).

The interest rate on new corporate term deposits stood at 3.27%, 0.03 percentage points lower than in May. New transactions totalled 7,479 million euros, representing a drop of 96 million compared to last month. As with individuals, term deposits of up to one year were also favoured and accounted for 99% of new deposits.

Housing loan interest rate has been falling for nine consecutive months

In June, loans to households totaled 2,317 million euros, which reflects a decrease of 235 million compared to May. The average interest rate on new housing credit operations fell from 3.71% in May to 3.68% in June, falling for the ninth consecutive month.

The average rate for new contracts decreased in June, settling at 3.59%. As for renegotiated loans, the decline was more pronounced (0.04 pp), to 4.03%.

To companies, the amount granted was 2.364 million euros, an increase of 532 million euros compared to the previous month. “This growth was due to new contracts whose amount increased by 549 million euros, to 2,063 million euros. The amount of renegotiated contractsdecreased by 17 million euros, to 301 million euros”, explains the Bank of Portugal.