By first getting up early to queue at the Bank of Spain and then clicking on the Treasury website, individuals in Spain have already dedicated 13,316 million euros this year to buying public debt bills, the product that, due to its profitability, and security has become the star of the small saver's investment. A record encouraged by the low profitability of deposits and also by the amount of savings accumulated during the pandemic.
During the past year, seeing an individual buying a Treasury bill was quite an anomaly. Between January and June, in the auctions of three-, six-, nine- and twelve-month securities held each month by the agency dependent on the Ministry of Economic Affairs, the requests from individuals were so small that they were classified as “not accepted.” In June 2022, for the first time, there was demand for 310,000 euros in bills. Then, with the first rate increases by the European Central Bank (ECB), it increased, until it totaled around 1,350 million euros for the year as a whole.
This figure darkens when compared to what happened this year. Until August alone, the amount has multiplied tenfold and, despite the initial enthusiasm having been contained, it continues to grow. In January, the Secretary General of the Treasury, Carlos Body, already warned individuals that the bills are “a safe investment that has also begun to be profitable,” and the message reached its destination. A few days later, the first queues of retirees appeared at the Bank of Spain, attracted by a profitability of almost 3% that, in those days, no bank offered. “This is really good and not bitcoins,” was heard in the queue. To increase the enthusiasm, the Treasury website collapsed due to the number of requests.
Eight months later, it is now possible to take an x-ray of what happened. Twelve-month bills have been the most demanded by individuals, with 6,250 million to date, compared to 2,976 million nine-month bills, 2,571 million six-month bills and 1,519 million three-month bills, according to Treasury data. .
The real boom was concentrated in the months of February and March, with a peak in the first of them in demand for twelve-month bills of 1,194 million. The highest profitability has been marked by this one-year debt, which went from just 1.4% a year ago to 2.9% in January and 3.8% in July, its maximum in several decades. Now interest has moderated to 3.6% and, for the first time, nine-month bills have surpassed them in profitability, marking 3.7%. The performance of the different time references is becoming more similar, an indication of less volatility in the debt market and that the ECB's interest rates will tend to stabilize.
As with any investment, the goal is to beat inflation. The bills managed to do so in June, which bank deposits cannot boast of, whose profitability has gone from 0.67% in January to 2.33% in July. Of course, there is a riskier bet that has yielded more: variable income. So far this year, the Ibex has appreciated 14%.