A new certified product to maximize the return on your savings

BarcelonaThe savings rate among Spanish citizens has increased in recent years. However, it's well known that keeping money in the bank without investing it is losing money, because the interest rates on current accounts in Spain are among the lowest in Europe, below the inflation rate. If you have money and don't invest it, its real value decreases over time. Furthermore, the real estate sector is the preferred investment for citizens when they have savings, which ultimately also contributes to rising housing prices. For this reason, the Spanish government is preparing a new financial product, already launched in other European countries: a savings and investment account, bearing the Finance Europe label. Currently, the Ministry of Economy, headed by Carlos Cuerpo, has launched a public consultation on this product. It would be an account where citizens could deposit a portion of their savings and, similar to investment funds, allocate the money to various products such as stocks, bonds, investment funds, and others. The objective is twofold: to ensure savers obtain a higher return on their money, and to ensure these funds are used to finance European businesses and economies.

The ministry's public consultation is intended to allow individuals and entities affected by this savings and investment account and the Finance Europe label to contribute their input. Interested parties are being asked about the basic configuration of this account, including potential maximum and minimum balances and the number of accounts each individual could hold, potential providers of this product, the terms and fees it should have, and the investment assets that could be included to provide adequate returns with acceptable security. The consultation can be accessed on the ministry's website.

The consultation will inform the development of regulations for this product. The ministry explains that these types of accounts are structured products designed to channel a portion of savings "simplely and cumulatively over time" towards a variety of financial assets offered by authorized intermediaries. In fact, the ministry points out that some European Union member states already offer these types of products, including Denmark, Estonia, Finland, France, Hungary, Italy, Latvia, Lithuania, Poland, Slovenia, Slovakia, and Sweden. According to the ministry, these countries have demonstrated that these products are "useful" for channeling housing savings into "diversified, long-term" investments.

The ministry's starting point is that housing savings have been rising in recent years and now represent 13% of disposable income, a level "significantly higher" than in the previous decade. Despite this increase, the real estate sector still holds a "significant weight" in housing assets, approximately 75%. In contrast, much less is invested in financial assets. Just over a third (35%) of these savings are held in cash and deposits, and, moreover, 85% of these deposits are "very low-yield."

With this data, the ministry sees a good opportunity to channel these very low-yield savings into more profitable financial assets. There is "significant potential" for mobilization towards capital markets that would improve returns for households, the department headed by Carlos Cuerpo indicates in its consultation.

Climate transition and strategic autonomy

The ministry indicates that this product aims to improve the profitability of citizens' long-term savings. It also seeks to channel a portion of household savings toward financing the European economy, a key objective in the European Union's financial sector. "A more integrated, liquid, and deeper European capital market will contribute to the dual objective of financing the challenges facing the European Union, including the climate and digital transitions, as well as security and strategic autonomy, and providing citizens with greater savings and investment opportunities," the ministry concludes, noting that last September the European Commission announced an investment within the framework of the Savings and Investment Union strategy.