After waking up early to queue at the Bank of Spain and then clicking on the Treasury's website, private individuals have already spent 13.316 million euros in Spain this year to buy public debt bonds, the product that its profitability and security has become the investment star of the small saver. A whole record animated by the low return on deposits and also by the amount of savings accumulated during the pandemic.
Last year, seeing a private individual buying a Treasury note was quite an anomaly. Between January and June, in the three-, six-, nine- and twelve-month bond auctions held every month by the body under the Ministry of Economic Affairs, requests from individuals were so small that they received the rating of "no accepted". In June 2022, for the first time, there was demand for 310,000 euros in bills. Then, with the first interest rate hikes by the European Central Bank (ECB), it continued to increase, until totaling around 1,350 million euros for the year as a whole.
This number pales in comparison to what has happened this year. Only until August the amount has multiplied tenfold and, despite the fact that the initial enthusiasm has been contained, it continues to grow. In January, the general secretary of the Treasury, Carlos Cuerpo, already warned individuals that the letters are "a safe investment that has also started 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 return of almost 3%, which, in those days, no bank offered. "This is indeed good and not bitcoins", he felt in the queue. To add to the enthusiasm, the Treasury website collapsed due to the number of requests.
Eight months later it is already possible to take an x-ray of what has happened. Twelve-month bills have been the most requested by individuals, with 6,250 million so far, 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 February of twelve-month bill demand of 1,194 million. The biggest return was on this one-year debt, which rose from just 1.4% a year ago to 2.9% in January and 3.8% in July, the highest in several years . Interest has now moderated to 3.6% and, for the first time, nine-month bills have surpassed them in profitability, as they mark 3.7%. The performance of the different temporary benchmarks is increasingly similar, an indication of less volatility in the debt market and that ECB interest rates will tend to stabilise.
As with any investment, the goal is to beat inflation. Bills achieved this in June, something that bank deposits cannot boast of, whose return has gone from 0.67% in January to 2.33% in July. Of course, there is a riskier bet that has paid off more: equities. Since the beginning of the year, the Ibex has rallied by 14%.
