Treasury Bill yields collapse, boosting fixed-term deposits

The impact of the European Central Bank's (ECB) latest interest rate cut has been felt in the first auction of six- and twelve-month Treasury Bills, whose yield has collapsed below the 2% barrier, reaching the lowest rate since autumn 2022 and following the trail of the last auction in April, of three- and nine-month bonds. This adjustment, although it has also been recorded in the average rate of fixed-term deposits , has made Treasury Bills lose much of the attractiveness compared to the best bank offers, which, in some cases, pay around 3%.

It's true that to get the highest interest rates without ties, you have to go to the European market, although many banks have branches in Spain, which makes it easier to declare the profits earned. In these cases, the bank applies the withholding directly, and the client avoids having to enter it manually in their tax return.

Specifically, at last Tuesday's auction, the first of May, the Treasury awarded an interest rate of 1.954% to six-month Treasury bills and 1.900% to twelve-month debt, with an issue of nearly €5.77 billion, compared to a demand of over €10.335 billion .

How much money can you make with Treasury Bills?

Therefore, with an investment of 10,000 euros in six-month bonds, the gross profit, if the bonds had been purchased at this auction, would be just under 100 euros , while with the same amount in a one-year term, the gross income would be around 190 euros .

The 6-month deposits that pay the most interest

Meanwhile, the Portuguese bank BiG, which has a branch in Spain, is offering a 3% APR for six months . Therefore, with a deposit of €10,000, the gross amount at maturity would be around €150, compared to less than €100 guaranteed by public debt for the same term.

However, it should be noted that banks typically set limits on the amounts that can be invested in their fixed-term deposits . In this case, Banco BiG requires a minimum deposit of €10,000 and a maximum of €75,000. Treasury Bills, on the other hand, are issued at a discount, with a face value of €1,000, so the minimum deposit amount is this amount, and if it is higher, it must be a multiple of that amount.

Other top-rated offers for these terms are offered through the Raisin platform. Banca Progetto, from Italy, pays 2.61% APR for six months, provided that a deposit of at least €10,000 and a maximum of €90,000 is made. With a €10,000 investment, the gross profit would be approximately €130.

On the other hand, Haitong, also from Portugal and with a Spanish branch, offers a six-month APR of 2.52%. In this case, the minimum investment amount is €10,000 and the maximum is €100,000. Depositing the minimum would result in a gross return of just under €130.

The 12-month deposits that pay the most interest

For the twelve-month term, Mano Bank and SME Bank, both from Lithuania, are offering a 2.70% interest rate for investments of €20,000 and €10,000, respectively, up to a maximum of €100,000 in both cases. This represents a gross return of approximately €270 after one year for a €10,000 investment (€540 if SME Bank's minimum is met), compared to the €190 that the one-year Treasury Bills purchased at the last auction would offer.

If you're looking for an option with a Spanish branch, Haitong Bank pays 2.56% APR for this term, under the same conditions as its six-month offer. In this case, an investment of €10,000 would result in a gross profit of just under €260.