Savings Certificates will yield less than the current maximum value of 2.5% starting in April this year. The decrease in interest rates, particularly the three-month Euribor rate, which serves as a reference index, will cause, after more than two years, the return on this government savings product to fall below the maximum limit.
While the recent drop in the Euribor rate may be good news for those with loans tied to variable rates, in savings, this development will result in lower returns – especially in products like the savings certificates, whose return is directly calculated from market values.
EURIBOR Rate at 3, 6, or 12 months: Which is the Best Option?
The EURIBOR has different terms: 3, 6, and 12 months. The choice of the most suitable term depends on each person’s financial profile, and it is possible to compare the advantages and disadvantages of each:
3 months :
- Advantages:
- Reflects interest rate decreases more quickly.
- Greater stability in scenarios of falling rates.
- Disadvantages:
- The payment changes every 3 months.
- In periods of rising rates, the payment increases more rapidly.
6 months :
- Advantages:
- Offers a balance between stability and adjustment to the market.
- Semi-annual revisions provide more time to adapt to changes.
- Disadvantages:
- May not immediately reflect interest rate decreases.
- Less predictability during times of high volatility.
12 months:
- Advantages:
- Greater stability, as the payment is adjusted only once a year.
- A good choice during periods of low and stable rates.
- Disadvantages:
- If interest rates fall, the reduction in the installment will take longer to be reflected.
- If rates rise, the increase in payment will be felt throughout the entire year.
What is the Best Choice?
- For those who prefer greater stability, the EURIBOR at 12 months may be the most suitable option.
- If the priority is to adjust the payment quickly, the EURIBOR at 3 months might be more advantageous.
- For a balance between stability and flexibility, the EURIBOR at 6 months is often the most popular choice among the Portuguese.
