Caixa Geral relents over zero interest deposits

Paul Rees 13 July 2019

caixageral2 Consumer champion, DECO, has seen pressure put on Caixa Geral produce results. The taxpayer owned bank has decided to resume paying interest on low value deposits.

"Caixa Geral de Depósitos has retreated in its decision to stop paying interest on savings deposits," stated António Ribeiro, financial analyst at DECO.

"We were among the first entities to come out to criticize the Caixa Geral de Depósitos initiative," added Ribeiro, pointing out that the zero interest measure had been, "a very bad signal given to the savers. We also warned against the danger of other banks following in the footsteps of Caixa Geral de Depósitos.”

This week the normally comatose Bank of Portugal actually expressed its opposition to the decision by Caixa Geral to withhold interest below €1 due tio be paid out on deposits.

Caixa's decision adversely affected smaller savers. In order to earn €1 of interest (at the gross rate of just 0.015%), savers needed to deposit €6,667 for 12 months. Anyone investing below that amount would receive no interest at all.

For a six months deposit, investors would need to lodge over €13,332 to receive one euro.

”Since the beginning of this controversy, we have emphasised that interest payment is a client's right, so this decision of Caixa Geral, even if legal, is not morally correct,” said DECO.

Caixa Geral de Depósitos has notified its customers with fixed rate savings deposits that interest rates were changing. As of August 1, the semiannual interest on commercial deposits (Caixapoupança, Caixapoupança Reformado, Emigrante, Superior), will fall from 0.05% to a miniscule 0.015%, a reduction of 70%.

According to Cixa Geral’s indifferent management, the customer had, "the right to terminate the contract, immediately and without charge before the proposed date for the application of said rules, otherwise he will be considered to have accepted the alterations indicated."

Caixa justified its mean-spirited measure with one of its hallmark facile statements, "the lower capacity for remuneration of deposits and savings by the banking sector is based on the need for progressive adjustments, in order to ensure the sustainability of the sector." Quite....

Comments

+4 #8 Dorothy 2019-07-21 20:28

Quoting Maxwell:

An excellent example of the huge gulf in evolution between the 4 centuries of the UK banking system and the fusion Islamic and Western system in Portugal. Carney slams an entire sector of investment worth hundreds of millions in taxation - those offering instant return of your investment yet have client funds invested in illiquid stocks that will take months to cash in. Like the now frozen Woodford Funds. Then watch the Lisbon MP Committee examining the CGD debacle and the Bank of Portugal's role in not regulating the Portuguese Banking sector over the years. Note how so much honour is involved in swindling bank customers and losing billions to special clients offering no secure collateral that the MP's shut down the cameras and mikes. Then impose a delayed recording to allow any errant MP's to be edited out on a discussion as simple as what phrase to use in a report - 'ruinous' management or, the milder winner, 'imprudent' management. Remember that the Portuguese MP's in their parody of democratic scrutiny theoretically have Parliamentary privilege so should be able to slam by name the s**theads who stole the money or the s**t bankers that allowed it to be stolen!

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Yeah, totally agree Portugal is just as bad as Britain.

-2 #7 Maxwell 2019-07-19 11:01

An excellent example of the huge gulf in evolution between the 4 centuries of the UK banking system and the fusion Islamic and Western system in Portugal. Carney slams an entire sector of investment worth hundreds of millions in taxation - those offering instant return of your investment yet have client funds invested in illiquid stocks that will take months to cash in. Like the now frozen Woodford Funds. Then watch the Lisbon MP Committee examining the CGD debacle and the Bank of Portugal's role in not regulating the Portuguese Banking sector over the years. Note how so much honour is involved in swindling bank customers and losing billions to special clients offering no secure collateral that the MP's shut down the cameras and mikes. Then impose a delayed recording to allow any errant MP's to be edited out on a discussion as simple as what phrase to use in a report - 'ruinous' management or, the milder winner, 'imprudent' management. Remember that the Portuguese MP's in their parody of democratic scrutiny theoretically have Parliamentary privilege so should be able to slam by name the s**theads who stole the money or the s**t bankers that allowed it to be stolen!

0 #6 AL 2019-07-15 09:28

Quoting Darcy:

Quoting Jeff Brown:
With a global financial meltdown looming that will hit the ill prepared eurozone particularly hard this is not the time to be using Portuguese banks ! Still with no cast iron certain government backed minimum 100K return of your savings. Far better to be thinking colchão or damp proof packets in $ or £'s down your poço ou furo.
https://www.zerohedge.com/

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I will be keeping my money in a Euro Zone bank account, UK banks are too risky for now and until Britain leaves the EU.
After 20 years in existence, it's safe to say that the Euro is too big to fail. Stirling on the other hand is a small currency and will be very fragile when it is removed from the European Union.

You two have missed the point especially if you read zerohedge.com. It doesn't matter which bank you keep your electronic money it will be worthless after a global financial meltdown. If you are looking for investment the only think that will maintain it's value is precious metals. That is why Russia and China have been stocking up on gold for several years now.

-2 #5 Bev 2019-07-15 00:02

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I will be keeping my money in a Euro Zone bank account, UK banks are too risky for now and until Britain leaves the EU.
After 20 years in existence, it's safe to say that the Euro is too big to fail. Stirling on the other hand is a small currency and will be very fragile when it is removed from the European Union.

The Euro might not fail but there should be zero confidence in the Portuguese banking system. They are far less reliable than other EU banks, seeing how they operate over many years has reinforced my decision to not put one dollar in an account here.

-2 #4 Darcy 2019-07-14 15:39

Quoting Jeff Brown:

With a global financial meltdown looming that will hit the ill prepared eurozone particularly hard this is not the time to be using Portuguese banks ! Still with no cast iron certain government backed minimum 100K return of your savings. Far better to be thinking colchão or damp proof packets in $ or £'s down your poço ou furo.
https://www.zerohedge.com/

+1 #3 Will Baines 2019-07-14 10:32

Quoting Jim Williams:

Certainly you can terminate the contract but, as so many of us have experienced when banking with CGD, you then have weird badgering to stay on board. Strongly urged to think it over, read the alternate deposit literature, wait a bit, don't rush it - come back next week. Finally being told that the clerk handling our account is not available to close it. Presumably time locked in the safe?

I personally can't complain about the CGD closing procedure, my closure last month was completed in one visit which went very smoothly, maybe I was lucky in that I got a counter clerk who I had dealings with for many years.

+3 #2 Jeff Brown 2019-07-14 08:38

With a global financial meltdown looming that will hit the ill prepared eurozone particularly hard this is not the time to be using Portuguese banks ! Still with no cast iron certain government backed minimum 100K return of your savings. Far better to be thinking colchão or damp proof packets in $ or £'s down your poço ou furo.
https://www.zerohedge.com/

+1 #1 Jim Williams 2019-07-13 20:47

Certainly you can terminate the contract but, as so many of us have experienced when banking with CGD, you then have weird badgering to stay on board. Strongly urged to think it over, read the alternate deposit literature, wait a bit, don't rush it - come back next week. Finally being told that the clerk handling our account is not available to close it. Presumably time locked in the safe?

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