The Savings Value Treasury Certificates replace Growth Savings. Find out how these products work and how much they yield.
The Savings Value Treasury Certificates (CTPV) were made available by the State in September 2021. These certificates replaced the Savings and Growth Treasury Certificates (CTPC), which had been in force since 2017.
We can already tell you that this State savings product offers a lower remuneration and a lower premium than the CTPC.
Savings Value Treasury Certificates: how they work
The Poupança Valor Treasury Certificates (CTPV) are a savings/investment instrument that allows buy Portuguese state debt with one flat rate guaranteed🇧🇷
Why were they created?
To approximate the characteristics of the Treasury Certificate to the current financing conditions of the Republic, as announced by the Government. Once again, note that this financial product was developed with the intention of replace the previous Savings Growth Treasury Certificates (CTPC).
Since when can we subscribe?
Subscription to this product started on September 13, 2021. Can be subscribed from 1000 eurosin the usual channels: AforroNetCTT and Espaços Cidadão, as well as the previous Treasury Savings Growth Certificates, which no longer admit new subscriptions.
What are the minimum and maximum amounts to invest?
The minimum subscription amount corresponds to 1000 units and the maximum to 1,000,000 units. O nominal value of each unit corresponds to one euro🇧🇷
The main features of these Treasury Certificates are as follows:
- Increasing interest rate up to 1.60%;
- Remuneration bonus of up to 1.5%;
- Free subscription and withdrawal;
- Easy to subscribe, easy to redeem;
- Minimum investment of €1000 and maximum of €1,000,000;
- Interest is calculated and paid every year.
The CTPV has fixed interest rates for each year of application, according to the Portuguese Treasury and Public Debt Management Agency (IGCP):
- 1st year – 0.70%
- 2nd year – 0.70%
- 3rd year – 0.80%
- 4th year – 0.90%
- 5th year – 1.00%
- 6th year – 1.30%
- 7th year – 1.60%
Note that the interest rate from the third year is plus a premium, as a function of the average real growth of the Gross Domestic Product (GDP). It corresponds to 20% of the average real growth of Portuguese GDP in the 4 known quarters in the month prior to the interest payment date. It can be at most 1.5%🇧🇷
You can redeem the invested amount, but this is only possible after one year from the subscription date.
What’s the risk?
In truth, the risk is zero🇧🇷 Especially because you can redeem the amount invested after one year, only retaining the right to interest.
Savings Value Treasury Certificates yield less
Two characteristics remain in relation to the Certificates of the previous series: the maturity of the Poupança Valor Treasury Certificates is seven years and the fixed rate is increasing. However, the fees are lower: the Poupança Valor Treasury Certificates pay 0.7% in the first two years, increasing to 0.8%, 0.9% and 1% in the following years, and in the sixth and seventh years they offer a remuneration of 1.3% and 1.6% gross.
In this way, you need to keep the investment until the end to secure the highest rates. In terms of average rate, new Certificates pay 1% if you hold the titles until the end🇧🇷 If you redeem your investment earlier, the yield will always be lower. When we talk about average net rate, the value becomes 0.7%.
The former Treasury Certificates for Savings Growth had an average remuneration of 1.35% gross over the seven years, which corresponded to 1% net.
What happens to old Certificates?
CTPC subscriptions have already been closed. The Certificates you already had do not disappear with the new ones, they only end when they reach maturitythat is, seven years after the subscription date.
Unfortunately, for more conservative investors, who are looking for virtually zero or totally zero risk, there are not many alternatives, not least because those that exist yield less, as is the case with term deposits.
There is also the possibility of Saving Certificates, which have a better yield. THE gross interest rate for new subscriptions of Savings Certificates, Series E, in November 2022, it was set at 2.492%🇧🇷
Take the opportunity to rethink whether you should change your mindset as an investor and maybe be a little more aggressive! Good investments and even better savings.
Article originally published in January 2022. Updated in November 2022.