Inflation, loss of purchasing power, or debt repayment are some of the things Spaniards pull savings for. The data shows that families are turning to the money they have in savings to cope with the current economic situation. Of great importance in this decision is the fact that banks do not reward these products, so the Spaniards direct this money to investment products that give greater returns.

According to the data of the Bank of Spain for May. Spanish households withdrew €3.7bn in deposits in one month. Families currently have these products for 979,700 million euros, compared to 983,400 million euros. These products reached one trillion euros in December 2022, a record high. Thus, in the first five months of the year, family savings on deposits decreased by 24,600 million euros.

This product is usually one of the favorites of the most conservative savers because it is not subject to volatility and has instant liquidity, meaning money can be used without problems. However, large banks do not pay deposits and even move away from passive war. A situation that led First Vice President and Economy Minister Nadia Calvinho to publicly demand that the sector endure rate hikes on all products, that is, that they reward deposits. Actually, this will be one of the issues that will be discussed at the meeting with the bank this Thursday.

The bank remained against this requirement and guarantees that the deposits “They are not the best tool and not the most effective”. Carlos Torres, President of BBVA, noted that excess liquidity in the sector is the main reason that deposits are not being rewarded and added that once it is absorbed, we will see how the market develops. For their part, CaixaBank Chairman José Ignacio Goyrigolsarri and Banco Sabadell CEO Cesar González-Bueno were more forceful and critical of Calvinho’s remarks. González-Bueno warned the minister that it would be competition that would determine when deposits were rewarded, not “when she says so.” So did Goirigolzarri, who went even further and pointed out that neither the government nor employers should decide on pricing policy. In fact, he went further and indicated that every bank should note this.

Banks have decided to develop a range of products, such as savings funds or insurance, to offer returns to individuals, such that over 40% of customer resources are currently out of balance. However, the rewards on deposits of companies that suffered the most at negative rates began, as banks did charge these products to companies.

In fact, in the month of May, companies also increased their money for these products. Bank of Spain data shows companies have €298.9 billion in deposits, up €5.3 billion from April. Despite this increase in the most recent month for which data are available, money on deposit in the business sector fell by 18.9 billion euros in the first five months of the year. At the end of 2022, companies had 317,800 million deposits.