EBN Banco announced this Tuesday the launch of a new deposit that offers a maximum return of 3.55% APR (Annual Equivalent Rate). It has several terms: three, six and 12 months. In order to hire it, it is necessary, yes, contribute at least 20,000 euros. This profitability places this deposit as the most profitable among those that can be purchased in Spain, a ranking headed until now by Cetelem. What is striking about EBN’s announcement is that it occurs at a time when the vast majority of banks are cutting interest on their fixed-term deposits.
That 3.55% means, on the other hand, almost one point more profitability compared to what Treasury Bills pay Spanish at the same time. In the last 12-month Bill auction, held this Tuesday, interest was slightly above 2.6%, rising from 2.57% in last month’s auction (which was an almost 2-year low ). The 12-month Treasury Bills are close to losing 2.5% profitability.
In the note they have sent to the media it is explained that it is a “combined deposit”, since it implies a link: the subscription of fixed-term deposits (with that 3.55% return) is combined with investment through managed portfolios or investment funds).
These deposits can be of two types, “but always,” according to Manuel Puente Gascón, Chief Customer Officer at EBN Banco, “they will be clean class funds, or those that have cheaper subscription commissions for the retail client.” EBN is one of the few entities that offer calls in Spain clean classes of funds, cheaper for investors, since they eliminate retrocessions (the part of the price that the marketer keeps). “The average savings on commissions for these products is around 30%,” says Puente.
One of the product types requires a minimum investment of 20,000 euros (10,000 euros in deposits and another 10,000 in funds). The investor can contract directly through the website, in the supermarket of EBN Banco investment funds, more than 1,700 national and international funds, as detailed in the statement sent by the bank.
The other type is contracted through the managed portfolio service from EBN Bank. The client delegates management to a professional investment team based on their risk profile. The minimum investment is 60,000 euros (10,000 in deposits and 50,000 in portfolios) and there are four portfolio models: conservative, moderate, dynamic or aggressive. “The value proposition is independence, since the entity’s products are not marketed and the client has access to the cheapest classes of investment funds,” the entity states in its note.
Why launch a product with this return at this time? Manuel Puente explains: “In this context of falling deposit yields, we are meeting many savers long-term investments that in life they had considered investing, but now, after 2 years of being accustomed to rates above 3%, they are telling us who want to take that step from saver to investor. That’s why we thought about offering them this product, which has a deposit part at an interesting rate but which also allows them to enter the world of investment with us.”
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