Caixa no longer to pay interest on accounts under €6,670
In yet another incentive not to hold a traditional bank account in Portugal, State-run Caixa Geral de Depósitos will cease paying interest on current accounts with less than €6,670.
“It’s not fair that Caixa is doing this. It means that all account holders with one-year deposits with less than €6,670 will not get a penny of interest which will penalise small savers. This is immoral. The bank should encourage savings” said Deco economist António Ribeiro in an interview with Eco.
CGD announced this week that it would no longer pay interest on deposits that paid out less than €1.
Deco says that the move will pave the way for other banks to do the same. Since 2017 CGD has steadily gone from the red back into the black from -€39 in Q1 of 2017 to 175 million in Q3 of 2018.
The bank led by Paulo Macedo is warning customers that it will reduce weekly interest on its savings accounts Caixapoupança, Caixapoupança Reformado (aimed at pensioners), Emigrante and Superior and Caixa Projecto from 0.05% to 0.015% (cut of 70%) from 1 August.
Interest payments on Fixed Term Deposits and Savings Deposits below €6,670 will also see a change in interest payment terms so that interest will not be paid whenever it has been calculated that the value of interest calculated is less than one euro. In other words, account holders with less than nearly €7,000 won’t get a brass farthing!
The bank states “the lesser capacity of banks to pay interest on deposits and savings means that in order to ensure the banking sector’s sustainability progressive adjustments are required within the current context.”
This new measure will cut across all deposit account products from CGD. However the bank says it has been offering more attractive options for customers with Contas Caixa (Azul, Platina, L, M, etc) as well as encouraging clients to diversify their portfolios by investing in financial insurance, funds and PPRs.