Italians have an advantage in Europe when it comes to savings account returns. But the pressure of the ECB’s monetary policy looms over our country’s generosity towards these savers. If the cycle of cuts continues, as is likely, deposit accounts will see a further contraction in returns. And despite starting from an advantage in Europe, Italian savers could face a compression of profit margins.
Until a few months ago, Italian deposit accounts were able to offer annual gross returns of up to 5% on tied productsnow even the best offers stop at 4% gross, a significant drop. Despite this, the Italian market remains one of the most competitive in Europe. According to an analysis conducted by Facile.it on Eurostat data updated to August 2024, deposit accounts with constraints of more than two years offer an average rate of return of 3.31% per year. This figure places Italy in second place in Europe, surpassed only by Lithuania, where savers can benefit from an average return of 3.84%. In third place is Estonia with an average rate of 3.24%, followed by France (2.96%) and Austria (2.77%). This prominent position makes Italy one of the most generous areas for European savers. Suffice it to say that in Germany the yield on time deposit accounts stands at only 2.31%, while in Spain it is particularly low, with an average rate of 1.24%, or less than half that of Italy. The comparison with other European countries therefore highlights a significant advantage for Italian savers who choose this type of investment.
But all eyes are on the ECB’s interest rate cuts. On the one hand, those who have a variable rate mortgage benefit from a reduction in monthly costs, but for those who rely on deposit accounts, the prospects are not so rosy. Facile.it notes that yields on restricted Italian deposit accounts fell on average by 25 basis points after the September cut, while those on non-restricted accounts saw a reduction of 15 basis points. And with the further cut in October, the expectations of further rate cuts are concrete.
If, however, we move on to consider the returns on current accounts, the situation changes radically. In Italy, current accounts offer an annual return of 0.37%, a figure slightly lower than the European average of 0.38%. At the top of the European ranking, Luxembourg account holders enjoyed an average annual rate of 1.54%, four times that of Italy. Conditions are also better in Austria and Germany, with rates of 1.04% and 0.62% respectively. Other European countries have managed to do worse than Italy: Spain offers an average return of 0.17% on current accounts, while France even reaches almost zero levels with 0.06%.
