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Savings or deposit insurance: Which product pays more for savings?

Date: March 28, 2023 Time: 08:34:53

Insurers are filling the gap that traditional Spanish banking leaves uncovered. Specifically, given the lack of response from the large banks to the rate hike by the European Central Bank, which should be reflected in an increase in interest offered to their customers through their deposits, insurance companies have reactivated offers for the most conservative savers with much more attractive returns.

The products they market, savings insurance, have been improving their profitability in recent months, which has allowed insurers to now compete with time deposits from digital or foreign banks, whose proposals are much more attractive to the consumer. saver than those of national entities.

Specifically, Mapfre has taken another step in the war for savings with a reissue of the product for conservative profiles under the name ‘Million Life 2’. The company offers a return of 2.28% per year with a duration of two years. In addition, this option allows users who have less liquidity to access it, since they only require a minimum investment of 3,000 euros, while those who must require higher figures. This is the case of EBN Banco, which conditions its product to a minimum disbursement of 10,000 euros. However, the interest offered rises to 2.75% APR for two years.

Another option with the same minimum as that required by Mapfre -3,000 euros- is Deutsche Bank, although profitability drops to 1.85%. In this way, it does not even come close to exceeding the 3% that other deposits in the euro zone already exceed.

Although it was Mutua Madrileña that took the lead when it came to improving its products. In this case, the company guarantees a gross return of 2.60% per year through the Plus Fidelity Savings Plan II. This product is available from a much smaller amount, specifically, part of 750 euros, which makes it much easier for those with less capital to invest. Added to this offer is a feature that conservative investment products do not have: extinction coverage.

“The insurance guarantees the capital invested and an attractive return and also includes a benefit for the death of the holder, in which case the beneficiaries will receive the existing savings at the time, plus an additional capital of 10%, with a maximum of 1,200 euros. . In addition, it is backed by the guarantee and solvency of Mutua Madrileña”, assures the director of the life insurance area, Marta León.

In this case, the Italian Facto manages to improve the profitability offer proposed by the company, with a remuneration of up to 2.83% APR. Although, in this case, the saver must take into account that, firstly, they must have at least 5,000 euros to invest and, secondly, they will not obtain the death coverage that Mutua Madrileña allows. The same happens with the twelve-month offer from EBN Banco, which also does not reach the interest rate insured by the insurer and remains at 2.35% APR. For its part, the one-year return on the Deutsche Bank deposit falls to 1.60%

On the other hand, the profitability of Openbank deposits -with a remuneration of 1.25% APR- and ING -0.60% APR-, despite the fact that they are very low compared to the rest, allow savers to make their liabilities profitable no matter how small the sea, since the minimum amount required is one euro. Despite this, the most conservative banking strategies move little and slowly. Products like those of Openbank have only increased their offer by 0.25% -from the 1.00% APR to the current 1.25%- from the previous offer.

Both savings insurance and deposits are products with little risk, but it must be taken into account that the former are not under the Deposit Guarantee Fund, as is the case with fixed-term deposits, but rather depend on the solvency of the insurer. Even so, they compete with the offers of foreign neobanks and digital banks, which are the ones that currently meet the highest profitability expectations, in their struggle to expand their market share and capture liabilities.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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