Big banks were accused of going after savers three months ago when it emerged their profits had doubled.
While bankers were relieved that profits had returned to where they were before the European Central Bank’s negative interest rates, savers were angry that they were still receiving only 0.75 percent interest. WNL journalist Jort Kelder summarized a senior banker’s statement on Sunday: “Simply put, it comes down to this: We screw customers, that’s what we do.”
The storm immediately broke out in The Hague, where MPs called for a legal minimum savings interest rate, a link between the savings interest rate and the European Central Bank interest rate, more competition, easier restructuring, a profit tax and an own purchases tax. shares.
The House of Representatives proposed introducing an additional bank tax after outgoing Finance Minister Kaag promised to “restart negotiations on savings rates and high profits” with banks. The six big banks must collectively transfer 150 million euros to the state treasury in 2025, on top of the 470 million euros the banks have paid annually since the credit crisis.
Highest interest rate in 10 years
This additional bank levy hasn’t come into effect yet, but three months on from all the fuss and the world already looks very different for savers. According to comparison site Geld.nl, interest on a freely withdrawable savings account is at its highest level in the last decade, at 2.24 percent on average.
According to the website, there is even a struggle between Dutch savers at the moment. For example, Maltese, Belgian and Swedish banks attract Dutch savers with interest rates above 3 percent.
Major Dutch banks have now started to follow suit. The savings interest rate at ING and ABN Amro has doubled to 1.5 per cent since the previous quarterly figures were published. Rabobank and SNS are approaching the 2 percent level with 1.7 percent.
Foreign discounters currently offer interest rates of 4 percent and higher for savings accounts where deposits are fixed for three to five years. Dutch banks hold approximately 2.6 percent of these deposits.
In order to reduce the interest difference on freely withdrawable savings accounts, Rabobank has introduced a kind of intermediate form. Savings in the account called TijdslotSparen can be freely withdrawn or topped up after 90 days with an interest rate of 2.25 percent.
Yesterday it became clear that the Dutch Consumers and Markets Authority will investigate whether there really is enough competition in the Dutch savings market.
Saving in a checking account
Tomorrow ING will republish its quarterly figures and ABN Amro will follow in a week. These new figures should not only show whether profits are weakening somewhat due to the rising savings rate, but also whether savers are taking action. Not just by switching to a competitor with a higher interest rate, but above all by depositing his money in his own bank’s savings account.
Three months ago, when Rabobank’s profits doubled, CFO Bas Brouwers explained that they had hardly done so in the first six months of this year. He found in the books that “customers were slow to transfer money from checking accounts to savings accounts.”
According to him, savers had become so accustomed to receiving almost no interest for years that they left the money in interest-free checking accounts.
More than eight million Dutch households had a total of €449 billion in savings accounts in September 2023, according to De Nederlandsche Bank. This means an average of 54,000 euros per household. According to Statistics Netherlands, the average household’s savings balance is much lower, usually around 18,000 euros.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
