Last year, the pace of rate increases by the European Central Bank (ECB) gave monetary funds a second youth. These investment vehicles have gone from offering returns close to 0%, or even below, to ending 2023 with an interest of 2.8%, according to Inverco, the employer association that brings together collective investment institutions.
These products invest in short-term state debt, deposits or company promissory notes. In other words, in very low risk fixed income that, in turn, benefits from the high rates in the eurozone and that is reflected in the returns they offer: not seen for years.
Precisely, monetary funds have become an alternative to deposits both for the profitability they offer and for their security, since they invest in assets such as Treasury bills that, although they are not protected by the Deposit Guarantee Fund, have the support of the Spanish State, explain the experts of the financial comparator HelpMyCash.
Furthermore, unlike deposits, they have great liquidity, since the investor can sell their participation in this type of product at any time, either because they need the money or because they anticipate a possible change in the ECB's monetary policy. (by believing that the body will begin to lower rates in the short term).
From the HelpMyCash comparator they insist that "these products are a good alternative to deposits", although when investing "you should not look at past returns, but at the IRR, which indicates the expected return on the investment." .
Currently, there are different options on the market, although one of the most notable is the inbestMe Savings Wallet. It is a product made up of different monetary funds and ETFs that has an expected profitability of 3.60%, very interesting if you take into account that the deposits of Spanish banks do not reach this interest and that fixed terms are beginning to reduce profitability.
It has a risk of 1 out of 7. Likewise, it has very low commissions, which will allow you to further maximize your investment. Interest settlement is carried out on a daily basis. As for the amounts, the minimum is only 1,000 euros, while there are no maximums.
Other options to grow savings, but without taking risk, are interest-bearing accounts. Within these products there are interesting options that offer profitability ranging from 3% APR to 4% APR.
HelpMyCash uses Trade Republic as an example. The German bank pays a 4% APR on its remunerated account for a maximum amount of 50,000 euros, which gives a total profit of 2,000 euros. In addition, as the entity reports on its website, it is under the protection of the German Deposit Guarantee Fund, which protects up to 100,000 euros per owner and account.
Another of the most attractive offers on the market is sold by Banco Sabadell. The Sabadell Online Account offers a return of 6% APR for three months and then moves to 2% APR, which gives a total return of 3% and for 20,000 euros. In addition, starting in the second year, balances are remunerated with a 2% APR indefinitely. And with the additional advantage of a 3% refund on gas and electricity bills.
Finally, the EVO Smart Account stands out, with a profitability of 2.85% APR for a maximum amount of 30,000 euros and the N26 Savings Account, with a profitability of 2.26% and no maximum amount to be remunerated.
