Yields on cash deposits in Spain hover around 1.4% today, which is still high compared to banks in neighboring European countries. There are several factors that suggest the situation is getting out of hand. The Bank of Spain is expected to slash interest rates, and Treasury bonds are already at 0.6%. These are another popular parking spot for fixed income investments.
Because deposits are falling closer and closer to 0% interest, many conservative savers -- 45.9% of all long-term savings are in cash deposits -- will have to switch to products that are riskier but offer better yields.
