How to Earn Almost €5,000 in 3 Years with a Deposit Account

Is a Deposit Account Worth It?

Despite the ECB starting to cut interest rates on deposits, deposit account returns are still attractive.
According to Segugio.it and ConfrontaConti.it calculation simulations, the best deposit accounts offer a profit similar to the one currently guaranteed by 7-year BTPs.

Earning Nearly €5,000 in 3 Years with a Deposit Account

To achieve a significant profit with a deposit account in three years, the top options currently available are Banca Aidexa and Cherry Bank, offering competitive gross returns of 4.50%.
Depositing €50,000 can result in a net gain of around €4,995 after 3 years with Banca Aidexa, while Cherry Bank provides quarterly interest payments with a similar outcome.
For those seeking a less restrictive solution, illimity offers the “Premium Account” with a gross rate of 4.40%, ideal for non-withdrawable deposits of €50,000.

With an investment of €10,000, the net gain drops to approximately €1,000 with the same options.
However, it is important to evaluate other factors with smaller deposits, such as monthly management fees, as in the case of illimity, which requires a different fee depending on the type of account.

To find higher returns on deposited liquidity, looking abroad for other options is necessary.
For instance, Freedom24 is a trading platform offering gross returns of 5.43% on long-term deposits (12 months).
Depositing €50,000 can result in a net gain exceeding €6,000 in 3 years.

Deposit Account Returns

Deposit account returns vary based on conditions and duration of the commitment.
In June 2024, here are the best available options:

Bank	Commitment Duration	Gross Rate	Net Annual Gain (€10,000)	Net Annual Gain (€50,000)	Net Gain in 3 Years (€10,000)	Net Gain in 3 Years (€50,000)
Cherry Bank	12 months	4.25%	€314.50	€1,572.50	€943.50	€4,717.50
MeglioBanca	12 months	4.15%	€307.10	€1,535.50	€921.00	€4,606.50
Twist	24 months	4.30%	€318.20	€1,591.00	€954.60	€4,773.00
ViVibanca	24 months	4.25%	€314.50	€1,572.50	€943.50	€4,717.50
Banca Aidexa	36 months	4.50%	€333.00	€1,665.00	€999.00	€4,995.00
illimity	36 months	4.40%	€325.60	€1,628.00	€976.80	€4,884.00

This table provides a clear overview of the various deposit account options, including commitment duration, gross rates, and annual and three-year net gains for deposits of €10,000 and €50,000.
It’s essential to note that these returns are gross of the 0.20% stamp duty tax.

Comparing these options will help you choose the most advantageous deposit account for your financial needs.

How to Choose a Deposit Account

Choosing the most suitable deposit account for your needs requires a careful evaluation of various factors.
Firstly, it’s essential to consider the commitment duration.
The duration determines how long the funds will remain blocked and can significantly impact the offered returns.
Long-term deposit accounts tend to offer higher interest rates compared to short-term ones.

Another crucial aspect is the type of account: whether it’s tied up or free.
Tied-up deposit accounts offer higher returns but require the funds to remain blocked for a specific period.
Some tied-up accounts allow early withdrawal but often result in the loss of accrued interest.
Free deposit accounts, on the other hand, offer more flexibility, allowing funds to be withdrawn at any time, albeit with generally lower interest rates.

The frequency of interest payments is another element to consider.
Some accounts offer monthly, quarterly, or annual payments, which can influence the depositor’s liquidity.

Finally, it’s fundamental to evaluate the overall yield of the deposit account.
One should not only look at the gross rate offered but also consider taxes and any promotions.
The stamp duty tax, amounting to 0.20% annually of the capital, can impact the net gain.
Some banks, as part of promotions, offer to cover this tax, thus increasing the net return for the depositor.

In conclusion, choosing the ideal deposit account involves a careful assessment of the commitment duration, account type, interest payment frequency, and overall net yield, ensuring a conscious and advantageous choice.