Simple

Most deposits marketed by credit institutions are simple deposits, i.e. fixed-rate or floating-rate deposits, irrespective of the form of funds handling (time deposits or time deposits that cannot be mobilised in advance):

  • Fixed-rate interest-bearing deposit – the interest rate applicable to the deposit is known at the time the contract is signed and remains unchanged throughout the life of the application;

  • Variable rate interest-bearing deposit – the amount of the deposit’s remuneration depends directly on the developments in a monetary market reference rate, such as Euribor.

In these categories there may also be some variations, such as deposits with increasing rates (several fixed rates applicable to different deposit periods) or variable spreads (the spread being the margin that is added to the reference rate to calculate the remuneration, which may be positive or negative).

 

Pre-contractual information

Before signing the deposit agreement, the bank customer has the right to be informed in a clear and complete manner about its characteristics so that it can adequately compare the different offers and thus make an informed decision.

It is the document that credit institutions must make available to customers before the constitution of simple time deposits.

It must obey the format defined by Banco de Portugal (Notice No. 4/2009 – only in Portuguese) and, in the case of simple time deposits, it must at least:

  • Describe the conditions of access to the deposit;

  • Mention the means of handling the funds;

  • Indicate the term of the deposit, or conditions for the mobilisation, in the case of deposits redeemable at notice;

  • Mention the start and end dates and the capital repayment date;

  • Present the conditions for early mobilisation of the funds. If there are penalties for early mobilisation, their calculation method should be explained. In the case of a deposit that cannot be mobilised in advance, it should be expressly stated that the early mobilisation of the funds is not allowed;

  • If there is a possibility of renewal at the expiration of the time deposit, it must be indicated whether the renewal is automatic or optional, and in this case the deadlines and manner of exercise of the option by the depositor must also be indicated;

  • Indicate the currency denomination of the deposit and the existence of a maximum and/or minimum amount to constitute and maintain the deposit;

  • Refer to the possibility or obligation to make additional deposits of funds and describe the applicable conditions (namely minimum and/or maximum amounts, periodicity or dates of deliveries and applicable remuneration rate);

  • Describe the remuneration, specifying the applicable rates or their method of calculation, namely:

    • In the case of fixed rate remuneration: gross annual nominal interest rate and net annual nominal interest rate ; the various applicable gross and net annual nominal interest rates and the average gross annual nominal interest rate and net annual nominal interest rate when two or more interest rates occur over the life of the deposit; the net annual effective interest rate, when there is interest capitalisation;
    • In the case of variable rate remuneration: the reference rate and its sources of publication and the relevant date or the basis for determining the reference rate; frequency of review; spread; the form of rounding; graphical display of the developments in the value of the reference rate, for a period that includes, at least, the last 12 months.
  • If there is a possibility of interest capitalisation, it must indicate the periodicity and whether the capitalisation is automatic or optional, indicating in this case, deadlines and manner of exercising the option by the depositor;

  • Describe the method of calculating the interest, mentioning in particular the basis of calculation and the applicable rounding method;

  • Indicate the dates of payment of interest and the form of payment (namely, by credit in another account, or incorporation in the capital);

  • Expressly mention the existence of a guarantee for the total capital deposited at maturity and in case of early mobilisation, if permitted;

  • Refer to the period of validity of the conditions presented in the SIS, if applicable.

This is a document with information about the guarantee system that protects the deposits made in the relevant credit institution.

It specifies, inter alia, the limit of this protection and the repayment term of deposits in the event of insolvency of the institution.

The deposit information template must be signed by the holders who constitute the time deposit.