I’ve recently saved up some extra cash, but it’s been sitting in my current account earning almost no interest, which feels like a waste. With the news of the European Central Bank raising rates, I took some time to research the current deposit rates at various Spanish banks, and they’re so much better than a couple of years ago! I’ve put together some information to share and discuss with everyone, to see how to best choose an account, especially when considering making deposits in installments.
## Instant Access Savings Accounts
The main benefit of an instant access account is flexibility—you can withdraw your money at any time. In the past, the interest on these accounts was negligible, but now some banks are offering decent rates to attract customers. Online banks, in particular, are offering some very competitive rates.
- Trade Republic: This German-based online broker is now offering both new and existing users an interest rate of up to 4% APY on their cash accounts, for balances up to €50,000. This rate is highly competitive in the current market, and the funds are instantly accessible.
- Sabadell Online: Sabadell’s online account is also a decent option, offering 2% APY for the first year on balances up to €20,000. While not as high as the one above, as a major high-street bank with many branches, it’s convenient for those who may already be customers.
## Fixed-Term Deposits
If you have a lump sum of money that you know you won’t need for a specific period, a fixed-term deposit is definitely a better option, offering significantly higher interest rates than instant access accounts. Many banks from other European countries now offer high-interest fixed-term products to Spanish residents through platforms like Raisin, giving us plenty of choices.
I’ve made a quick comparison of some popular 1-year fixed-term deposits for your reference:
| Bank | 1-Year Interest Rate | Minimum Deposit |
|---|
| Banca Sistema | Approx. 3.95% | €20,000 |
| MyInvestor | Approx. 3.00% | €10,000 |
| Haitong Bank | Approx. 3.85% | €10,000 |
| Pibank | Approx. 2.97% | No minimum |
Note: These interest rates are subject to change, so always check the latest rates when you apply. Also, while deposits in foreign banks are also protected under deposit guarantee schemes, there may be tax reporting implications that you’ll need to research.
It seems like now is a great time to save. If your priority for depositing money in Spain is maximum flexibility and high returns, Trade Republic’s instant access account is very attractive. If you want to lock in a guaranteed return with your Spanish bank savings and are willing to sacrifice some liquidity, finding a high-interest European bank for a one-year fixed-term deposit through a platform is a great option. Which bank are you all using for your savings? Do you have any better recommendations or any pitfalls to avoid? Feel free to leave a comment and share your thoughts!
