Since mid-2022, the European Central Bank has raised interest rates several times to curb inflation. This shift touches millions of households with variable-rate mortgages. Banks tend to pass on recovery in loan collections quickly, yet they adjust deposit yields at a different pace.
The euro regulator has approved a sequence of increases, lifting the rate from 0% to its current level around 3%. That climb has pushed Euribor, the benchmark for many variable-rate mortgages, higher by roughly 250 euros per month on average. By contrast, the average return on one-year deposits in Spain was 0.42% last December, far below the EU average of 1.34% and notably behind countries like France and Italy, which offered around 2%.
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Consumer and advocacy groups report that this situation nudges deposit remuneration toward fairer levels. Organizations such as Adicae, Asufin, and Üçgal argue that higher interest rates should translate into higher returns for savers.
In response, the Spanish Banks Association (AEB) says deposit rates are already climbing. They note that monetary normalization requires a corresponding normalization in savings yields, and that international comparisons are tricky because European banking systems differ. AEB argues that in a highly competitive market, each bank sets rates according to its own policy, so broad generalizations are risky.
Why don’t savers see higher rates quickly? Large banks feel secure about their solvency and hold ample liquidity from ECB injections and pandemic-era savings, so there is less immediate pressure to raise yields. While significant gains are not expected right away, savers could see higher returns as rates continue to rise.
Conditioned by sector dynamics
According to Asufin, there is little incentive for banks to raise savings rates aggressively. The association suggests that liquidity will gradually tighten as ECB stimulus is trimmed, potentially elevating deposits as a more attractive funding source over time. The key lies in ratios—if they do not fall, a stable level could emerge, keeping a lid on a fierce race for deposits. Patricia Suarez, president of Asufin, notes that the environment could shift as stimulus decreases and deposits gain influence over the year ahead (attribution: Asufin).
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Analysts anticipate more activity among smaller banks, which may offer more appealing products to individual customers as access to ECB obligations becomes less straightforward. Market watchers see early signs of movement, such as renewed payroll-based customer acquisition resurfacing after a lull.
Adicae criticizes what they call the stubborn stance of large banks in offering only modest savings fees. They argue this behavior clashes with the pace at which financing for housing and consumer goods is rising. Over the past decade, mortgage costs moved by 0.72% over four months, with other loans rising by about 1.29% in the same period.
Record savings
Household deposits reached record levels, surpassing one trillion euros in December according to the Bank of Spain. In regions like Galicia, deposits stood at 77.648 billion euros at the end of the third quarter of 2022, up roughly 10.4 billion since the pandemic began. Despite these highs, Adicae notes that many citizens are nudged toward alternative products such as mutual funds rather than keeping money in accounts (attribution: Adicae).
To safeguard long-term sector stability amid inflationary pressures, experts argue that the banking model must maintain a direct path with consumers. Regulators are urged to take steps so savers can also benefit from higher rates without fearing a broader industry-wide pact that would curb competition (attribution: financial analysis).
Customer acquisition
Banks are expanding product suites to attract customers and deepen relationships, but the push is not only about higher deposit yields. The Consumers’ Union of Galicia notes banks aim to capture payrolls and leverage cross-selling opportunities from a range of services. The trend seems less about boosting savings returns than about building broader product ecosystems around each customer.
Some fee increases on accounts have been spotted, though this does not appear to be a direct response to rate changes. It seems banks aim to maximize revenue from financing across the board, including vehicle loans and other consumer credit. High finance costs in the used-car market can exceed 12% to 14%, a reality that weighs on household budgets when combined with rising rates (attribution: market analysis).