Which is the best bank for saving?

Discover the most important features a bank must have if you want to save money.
Many people are actively trying to save money. However, when choosing a savings product, it is common to find multiple options and banks with different conditions and offers. As a result, it's hard to find the perfect formula for deciding the best bank to put your savings in. In addition, each person has their own savings goals and their own characteristics, which can greatly influence the decision to choose one product over another. In this article we explain the most important aspects you should consider when choosing the best bank for your savings and how to find the right product for you.
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The returns on savings products

The return on a financial product is the relationship between the investment made and the profit paid back on said investment. It is generally expressed in percentage terms. For example, a product that pays back 110 on an investment of 100 has a return of 10%. In the case of savings products, such as savings accounts or fixed-term deposits, the return is equivalent to the interest received by the customer, who lends their money to the bank through these products.

When selecting a bank to open a savings account or a fixed-term deposit, you will quickly realize that the interest rates they offer very between them. The interest on these products is very closely correlated to the official lending rate, that is, to the monetary policy of the Central Bank (the ECB in the Eurozone), but also to market conditions and to the financing needs of the banks.

Normally, the interest rate on these products is fixed and known in advance. However, there are also structured deposits with variable interest rates that mirror the trends of certain assets. There is also an option to pay one part at a fixed rate and another at a variable rate.

Of course, if your goal is to save, it makes sense for you to look for an account or a deposit that offers a higher return, while evaluating the risks you can incur.

The risk of savings products

As we stated earlier, the risk of investment products is directly proportional to the returns they offer. Although it's true that savings accounts and fixed-term deposits are two of the safest and least risky products on the market, there are slight differences between the products that the various banks offer.

In general, if a bank is in particular need of resources, it will encourage this product by offering a higher interest rate. If a bank offers savings products with much higher returns than those offered by other banks, this could indicate a lack of solvency, which could, in principle, entail a higher risk for the investment.

However, at the beginning of this decade, Royal Decree-Law 16/2011 of October 14 was approved, creating the Deposit Guarantee Fund, which aims to guarantee deposits and other financial instruments held in credit institutions, such as checking accounts, for up to €100,000 per person and bank. This means that if an entity is unable to meet its commitments, you can recover your investment through the DGF. Therefore, the risk of the savings product as a function of the bank's solvency plays a minor role in your decision of where to put your savings.

The conditions of savings products

Other factors you should take into account when selecting a bank to deposit your savings in are the contract conditions that are offered by each. Depending on the bank where you deposit your savings, you may find differences involving:

  • Term: in the case of deposits, the term can be short or long, which affects the availability of the money deposited. Savings accounts, on the other hand, can be closed at any time.
  • Availability of the money: as mentioned earlier, the money in deposits can't be withdrawn until the term of the contract expires, although in certain cases it is possible to withdraw the capital by paying a penalty on the interest received. This penalty also varies depending on the type of product and the bank where it is held.
  • Minimum investment: some banks also require a minimum investment.
  • Fees: certain credit institutions charge opening, maintenance or administration fees.
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So, what's the best bank for saving?

As we have explained in this article, the best bank for your savings is the one that best suits your personal circumstances and your savings profile. When choosing a bank and putting your money into a savings product, you should look for a combination of returns, risk and conditions that fit your needs.

At BBVA, we know that different people have different personal circumstances, which is why we want to offer our customers the greatest possible variety of options, so they can choose the savings product that is best suited to their needs. Go to bbva.es or visit any of our branches to get more information on our savings accounts and fixed-term deposits.

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