How Much Cash Should You Keep in Your Current Account in Portugal?

Keep no more than 3 months of fixed expenses in your current account — anything above that is earning close to nothing while inflation eats it.

Most people with multiple accounts never actually calculate this number. They leave money wherever it landed — salary in one account, a transfer sitting in another — and assume the total feels right. It rarely is. The question of how much liquidity to hold in a conta à ordem is not a beginner question. For someone with accounts at two or three banks, it is a reconciliation problem disguised as a feelings problem.

Why the Portuguese Context Changes the Calculation

Portugal’s unemployment rate was 5.6% in June 2026 (Eurostat) — one of the lowest in recent memory. That matters because your emergency buffer and your current account float are two different things, and low job-market risk lets you make that distinction cleanly.

Banco de Portugal data on household balance sheets consistently shows Portuguese families park a disproportionate share of liquid assets in demand deposits compared to EU peers. Understandable habit. Expensive one.

Your current account should clear your month. That is its job.

The Number: What “Enough” Actually Means

A functional current account balance in Portugal sits between 1 and 3 months of fixed monthly outgoings — rent or mortgage, utilities, subscriptions, insurance, and debt repayments. Not total income. Not a rough guess. Outgoings.

If your fixed monthly costs are €2,000, you want between €2,000 and €6,000 in your conta à ordem. Below €2,000 and you risk an overdraft on a bad month. Above €6,000 and you are holding idle cash at 0–0.1% interest. Portuguese inflation ran at 2.4% in December 2025 (Eurostat) — a real loss of roughly €120 per year on every €5,000 above that threshold.

That is the cost of comfort. Name it.

Where the Rest Should Go

Everything above 3 months of fixed costs belongs somewhere that earns a real return. The options in Portugal are narrow but workable: Certificados do Tesouro Poupança Mais, PPR accounts with a guaranteed-rate tranche, or money market funds available through brokers like DeGiro or Carregosa.

The CTPM rate changes, so verify the current rate at IGCP before committing. As of June 2025, the CTPM rate was 3.5% (IGCP). That is materially above the 0–0.1% a standard demand deposit pays.

That gap is a tax on inertia. If you have read this far and still haven’t moved the excess, the gap is costing you now.

Move the excess. Stop leaving it to idle.

The Counterargument: “I Like Having the Buffer”

The strongest objection is psychological, not mathematical: a larger balance feels safer, especially for people with irregular income — freelancers, consultants, anyone whose monthly deposits vary.

That argument has merit up to a point. If your income swings by 40% month to month, holding 4 months of costs in your current account is defensible. But most salaried professionals in Portugal have predictable inflows. For them, the buffer argument is mostly inertia dressed up as prudence. One month covers a bad month; three months covers a bad quarter. That range holds for the large majority of salaried workers in Portugal.

Check the variance in your actual income first.

So What — The Calculation You Should Run This Week

If you want to see your real idle-cash position across all your banks without building a spreadsheet, MyCFO aggregates all your balances in one view — transfers excluded from the total.

Sum your fixed monthly outgoings: rent or mortgage, utilities, subscriptions, loan repayments.
Multiply that number by 3 — that is your current account ceiling.
Identify any balance at any bank above that ceiling and schedule a transfer to a higher-yield instrument within five business days.
Set a calendar reminder every quarter to recheck — costs change, and so does your ceiling.

“Every €5,000 sitting idle above your 3-month ceiling costs approximately €120 per year in real purchasing power at current Portuguese inflation.”

If you hold accounts at ActivoBank, Revolut, and a traditional bank simultaneously, your effective idle balance is almost certainly higher than you think. Transfers between accounts look like income until you strip them out.

The Answer Is a Number, Not a Feeling

Keep between 1 and 3 months of fixed expenses in your current account. Calculate the ceiling, move the excess, and revisit it every quarter.

Frequently Asked Questions

How do I calculate the right current account balance if I have accounts at multiple banks?

Add up the balances across every current account you hold — ActivoBank, Revolut, your primary bank, all of them. Then compare the total against 3 months of your fixed monthly outgoings. Most people with multiple accounts are surprised by the combined idle total. Each account feels modest individually — together they clear the ceiling easily. Strip out any inter-account transfers before you total the balances, or you will double-count.

Does it make sense to keep more cash in my current account if I have a variable income?

Yes, with a clear limit. If your monthly net income varies by more than 30%, hold up to 4 months of fixed costs rather than 3. Beyond 4 months, the protection stops paying for itself — move the excess into a liquid, low-risk instrument like Certificados do Tesouro or a money market fund you can access within a few business days. The goal is coverage, not comfort at any cost.

Is there a tax implication to moving excess cash out of a current account in Portugal?

Portugal withholds 28% tax on interest at source — you see the net figure, not the gross. You only need to declare it if you opt for aggregation in your IRS return. Moving money between your own accounts triggers no tax at all. At a CTPM rate of 3.5%, the after-tax return is approximately 2.52% — still well above the 0–0.1% a demand deposit pays (IGCP, June 2025).

Knowing the right current account balance is one thing — knowing your actual balance across three banks at once is harder. MyCFO pulls in all your accounts automatically, strips out inter-account transfers that would otherwise inflate the total, and shows you your real idle-cash position in one place. Find out where you actually stand →