An interest-bearing account works like a regular current account (you can deposit and withdraw money whenever you want), but it also pays interest on the balance, usually calculated and paid out monthly.
Difference from a term deposit
The big advantage over a term deposit is full liquidity: there's no penalty for withdrawing the money early. In exchange, the interest rate offered tends to be somewhat lower or subject to conditions (a maximum balance that earns interest, having your salary paid into the account, time-limited promotions).
What to check before opening one
- The actual interest rate (TIN) and whether it's promotional (only for the first few months) or permanent.
- The maximum balance that earns interest (many accounts only pay interest up to a limit, e.g., €10,000).
- Maintenance fees that could offset the interest earned.
Guarantee
Like term deposits, these accounts are covered by Spain's Deposit Guarantee Fund up to €100,000 per holder and institution.