€140,000 with no property: from 3% Treasury bills to 3.38% deposits

€140,000 with no property: from 3% Treasury bills to 3.38% deposits

A private individual sells the family home, is left with €140,000 in cash and rules out buying another flat to rent out. No mortgage, no tenants, no defaults. The problem is that this money has been sitting for months in a savings account that pays next to nothing, and the question that opens the discussion is the usual one: which product keeps inflation from eating into the capital without taking on a risky profile? The short answer, as of this discussion, is that nothing delivers a real return without accepting volatility. The long answer runs to several pages of calculations, warnings and the odd outburst.

Treasury bills at 3% and deposits that match or beat that figure

The first proposal to gain traction is twelve-month government debt. 12-month Spanish Treasury bills (Letras del Tesoro) are yielding around 3%, a simple return with reasonable liquidity and no surprises. The problem, as even its defenders admit, is that 3% doesn't beat inflation: it's fixed income, and fixed income in a high-inflation scenario loses purchasing power by definition.

Set against the bills are savings deposits. The comparison is quick: large Spanish banks offer around 2.5%, while institutions like Cetelem or Renault Bank place their two- and three-year products between 3.25% and 3.35% APR. Some even point to MiraltaBank via the Raisin platform, offering 3.38% over three years. The advantage of a deposit over a bill is liquidity: you can get the money back when an opportunity arises, though you forfeit the interest on the unexpired term.

The detail that untangles the tax question is the IBAN. A Renault Bank deposit, with a French licence, operates with a Spanish IBAN, which avoids the modelo 720 (Spain's declaration of foreign assets). The deposit guarantee fund is French, but the paperwork stays at home. The same logic applies to ING: Dutch bank, Spanish IBAN, Dutch guarantee.

The €100,000 limit and splitting money between institutions

Here comes one of the points with the most consensus. The deposit guarantee covers €100,000 per depositor and per institution. With €140,000 at stake, the repeated recommendation is not to leave it all in a single bank. The suggested formula is to split it between two institutions, or even break it into smaller deposits within the same institution if the product allows. The phrase that sums up the stance: nothing happens until the day it does.

The alternative gaining ground for those who don't want commitments is ING deposits at 3% for four months, split into fourteen instalments of €10,000. The idea is to earn interest while deciding the final destination, with the option to cancel part without a heavy penalty if something better comes up. A cushion with an expiry date.

Short-term fixed income funds and portfolios with gold

For those willing to take on a bit more risk, the proposal is a short-term fixed income fund, with bonds of one to three years, daily liquidity and an average return of around 4.2%. No need to worry about maturities, and you can exit any day. The next step up is a permanent portfolio: 25% money market, 25% global fixed income, 25% MSCI World and 25% gold, rebalanced every six months or annually. It's a way of adding some equities without the whole thing falling apart.

Gold and silver come up as a hedge. The claim is that they are on offer and have historically performed well in inflationary environments. The objection is reasonable: printing money doesn't guarantee the metal will rise; it depends on demand and on how much antiestéticar is already priced in.

Dividends, the IBEX and concentration risk

The most aggressive proposal is to build a portfolio of 30 dividend-paying companies with an initial dividend yield of 5%, growing over the years. The calculation being floated is that within a decade you could be pulling 8% or 9% a year on the initial capital, plus capital gains. The criticism comes fast: a portfolio concentrated in Spanish equities is a huge risk, and one bad decade for the IBEX is enough to wreck the return. The hybrid alternative floated is 40% in index funds and 60% in dividend stocks diversified across the Americas and Europe.

The tax blow is delivered by another participant: dividends are taxed at between 19% and 23% or more depending on the bracket, and that money no longer goes back to work in the market. For a conservative profile that only wants to avoid losing purchasing power, equities are not the answer.

Property as an asset and the spectre of squatting

The starting point of the person asking is that property has always been the best investment. Several messages qualify this: a rental property concentrates risk in a single asset, with defaults, regulation and management headaches. Whoever owns thirty companies has thirty sources of dividends; whoever owns one flat has one. The comparison isn't entirely fair, but the argument carries weight.

The conclusion that prevails is that there is no miracle product. For €140,000 and a profile with no risk tolerance, the real range boils down to Treasury bills, spread-out deposits and short-term fixed income funds. Everything else requires accepting that one day the balance will drop. The cautious prediction: if inflation eases, fixed income will deliver real returns again; if it doesn't, no conservative product will prevent the loss. And nobody knows which of the two will happen.