Did you know that your condominium’s reserve fund doesn’t need to sit idle waiting for future renovations? With smart management, you can make that money work and increase the resources available for your building.
What is the reserve fund?
According to Portuguese law, all condominiums must set up a reserve fund to pay for maintenance work on common areas, such as painting or elevator servicing. However, with approval from the owners’ meeting, the funds can be used for other purposes as well.
How to manage condominium funds?
A good practice is to divide the money into three parts:
-
Current account:
For regular expenses like water, electricity, and cleaning. Compare banking fees and choose the most cost-effective option. -
Short-term deposit (6 to 12 months):
For unexpected expenses or urgent repairs. -
Term deposit (1 to 5 years):
Best suited for the reserve fund, offering higher interest rates and better returns.
What’s the best investment option?
Although condominium savings accounts exist, they offer low interest rates and come with strict rules. Today, term deposits are generally a better choice:
| Feature | Condominium Savings Account | Term Deposit |
|---|---|---|
| Term | Usually 1 year | Various |
| Withdrawal without penalty | After 1 year, only for legal expenses | At end of term, as decided in the meeting |
| Flexibility of use | Very limited | More flexible, though penalties may apply |
| Top-ups allowed | Yes | Usually not |
| Formal requirements | Bank account + meeting minutes | Bank account + meeting minutes |
What is required before investing?
Before opening any savings product, the owners’ meeting must approve it by simple majority. When subscribing, the bank will request:
-
Copy of the meeting minutes approving the decision
-
Current account with the same bank
Make the most of your condominium’s savings and secure a smarter, more efficient future for all residents.
source: DECO PROteste.
