Term deposits or savings certificates — where to put safe money

The two safe options most Portuguese households compare. How to decide without chasing whichever rate you saw this week.

By António Avelar · Updated 17 August 2026 · 4 min read

It’s the question that shows up the moment somebody accumulates a few thousand euros and notices it sitting in a current account earning nothing: a term deposit at the bank, or government savings certificates?

The honest answer is that they depend on different things, and most people choose based on the rate they saw this week — which is the least stable criterion available.

What each one actually is

Term deposit. You lend money to your bank for an agreed period at an agreed rate. In the EU the capital is covered by the deposit guarantee scheme up to €100,000 per holder per bank. The rate is usually fixed up front, and breaking the term early typically costs you some or all of the interest.

Savings certificates. In Portugal these are Certificados de Aforro, lent to the state through the IGCP. The capital is state-guaranteed, with no €100,000 ceiling. The return is index-linked and compounds, and there is a minimum holding period before you can redeem.

Both are capital-guaranteed products. Neither is an investment in the growth sense — they are places to keep money you cannot afford to watch fall.

The three criteria that actually decide it

1. When do you need the money?

This question resolves most cases on its own.

Money you might need next month belongs in neither. It belongs in a current account or a deposit you can break without penalty, even at a lower rate. The difference between 2% and 3% on €3,000 for one month is about two and a half euros; having to break something in a hurry costs far more than that in lost options.

Money you will not touch for more than a year is where comparing rates starts to be worth the effort.

2. How much do you have?

Below €100,000 at a single bank, the deposit guarantee covers you and the credit-risk difference between the two options is, in practical terms, theoretical.

Above that, or if you would simply rather not concentrate everything in one institution, the uncapped state guarantee becomes a real argument rather than a footnote.

3. Is the rate fixed or index-linked?

Here is the difference people skip and later regret.

A fixed-rate term deposit is a bet on the direction of rates. If rates fall, you won. If they rise, you are locked into a number that stopped being competitive, until the term ends.

Savings certificates track an index, so they move with the market — better when rates rise, worse when they fall. Neither is better in the abstract; it is a choice about which direction you would rather be wrong in.

If you have no view on where rates are going — and almost nobody should — splitting between the two is a defensible answer rather than an absence of one.

The mistake that costs more than the choice

Chasing the promotional rate.

Banks launch term deposits at headline rates for new money, often for three or six months, and the money then rolls into a renewal at a much lower rate if you are not paying attention. The rate that made you open the account is not the rate you will be earning in year two.

It is worth setting up an annual check — attach it to the review described in the weekly money review guide — where you answer three questions:

1. What rate am I earning now? Not the one that attracted me. The current one.
2. What does the alternative pay today? Deposit versus certificates, both numbers side by side.
3. Is the balance still the right size? If your fixed costs went up, the fund that covered six months no longer does.

Fifteen minutes a year, and that is where nearly all the money in this decision sits.

Seeing both in one place

The practical problem is that these products live in different places. The deposit shows up in your banking app. Certificates live at the IGCP and appear in no banking app at all. Two halves of one decision, never visible at the same time.

Bica pulls both together — bank accounts over Open Banking, certificates directly from Aforronet — so the savings total is the true total. There is more on the certificates side in the savings certificates guide, and on the effect on your overall position in working out your real net worth.

A rule of thumb that holds up

For most households, the split that requires no forecasting at all is this:

• One to two months of spending in a current account, available today.
• The rest of the emergency fund in certificates or a breakable deposit — see how big the fund should be.
• Money with a purpose more than a year out in whichever pays better at the moment you decide, reviewed annually.

It is not optimised. It is robust, which is the property that matters for money you cannot afford to lose.