Consumer watchdog Deco has looked at investing €2,500 in each of 20 of Portugal’s banks and concludes that the sensible option is not to bother.
Many of the deposit interest rates on offer at Portugal’s high street banks will return negligible amounts and and in ten banks it was preferable to ‘put it under the mattress,’ according to an analysis published in the Protest Investse magazine.
The consumer protection institution looked at 20 banks and took recommendations on how best to invest €2,500 for a year. At many, the bank "charged more in account maintenance fees than the interest received."
In the test, the Protest Investe magazine showed that online banks did not charged commissions which made them more attractive for savers but the returns were below inflation.
Deco found the banks returned between €1.80 and €36, "but account maintenance fees reached €83.20" with the small amount of interest devoured by commissions and inflation.
In the test, Deco found that "in 10 banks, to open an account specifically to deposit €2,500 for a year means you lose money because they charge more in account maintenance fees than the interest you will receive."
According to Protest Invest, if you deposit €2,500, the average income for 12 months is 0.3% per year, so "after a year your nest egg will have increased by a staggering €7.50."
“This is less than needed to beat the inflation forecast for 2016 (1.2%) and about 5-11 times less than you pay in charges to the bank to save your money.”
Deco calls again on the Bank of Portugal and all political parties to recognise "the urgency in approving legislation that prohibits account maintenance fees, or only allow fees where the bank has actually done some work to justify them."
