Caixa Geral relents over zero interest deposits
Consumer champion, DECO, has seen pressure put on Caixa Geral produce results. The taxpayer owned bank has decided to resume paying interest on low value deposits.
“Caixa Geral de Depósitos has retreated in its decision to stop paying interest on savings deposits,” stated António Ribeiro, financial analyst at DECO.
“We were among the first entities to come out to criticize the Caixa Geral de Depósitos initiative,” added Ribeiro, pointing out that the zero interest measure had been, “a very bad signal given to the savers. We also warned against the danger of other banks following in the footsteps of Caixa Geral de Depósitos.”
This week the normally comatose Bank of Portugal actually expressed its opposition to the decision by Caixa Geral to withhold interest below €1 due tio be paid out on deposits.
Caixa’s decision adversely affected smaller savers. In order to earn €1 of interest (at the gross rate of just 0.015%), savers needed to deposit €6,667 for 12 months. Anyone investing below that amount would receive no interest at all.
For a six months deposit, investors would need to lodge over €13,332 to receive one euro.
”Since the beginning of this controversy, we have emphasised that interest payment is a client’s right, so this decision of Caixa Geral, even if legal, is not morally correct,” said DECO.
Caixa Geral de Depósitos has notified its customers with fixed rate savings deposits that interest rates were changing. As of August 1, the semiannual interest on commercial deposits (Caixapoupança, Caixapoupança Reformado, Emigrante, Superior), will fall from 0.05% to a miniscule 0.015%, a reduction of 70%.
According to Cixa Geral’s indifferent management, the customer had, “the right to terminate the contract, immediately and without charge before the proposed date for the application of said rules, otherwise he will be considered to have accepted the alterations indicated.”
Caixa justified its mean-spirited measure with one of its hallmark facile statements, “the lower capacity for remuneration of deposits and savings by the banking sector is based on the need for progressive adjustments, in order to ensure the sustainability of the sector.” Quite….