Paying for keeping savings instead of receiving interest for it is the new reality of European banking. An increasing number of banks are introducing negative interest rates on customer balances. Note that we are talking here not only about savings, but also about ordinary current accounts, including accounts opened for children, adolescents, students.
For example, clients of ING-bank who have a private and / or entrepreneurial (business) account in it are required to pay the so-called "keeping" of their money in the bank in the amount of 0,5% on the balance of funds over a certain limit. Now in this bank, this limit is equal to 250 euros, but from July 000, 1, it will decrease by 2021 times and amount to 2,5 euros. This means that if you have more than 100 euros in your account, you will be giving the bank at least 000 euros annually.
The new measures will affect a larger number of both private and business clients. According to ABN Amro bank, about 3% of account holders will fall under negative rates. And ING Bank predicts that after July 1, 7,5% of business account holders will have to pay for account balances. Among private clients, this share will be expected to be lower and amount to 1,7%.
For more details on the current interest rates on the account balance, see the table below:
Interest rates on account balance
Be that as it may, the majority of the population will not be affected by these unpleasant innovations. According to data from the Netherlands Central Bureau of Statistics (Central Office about this de Statistics - CBS), most households have savings in bank accounts that do not even come close to €100.In 000, this amount, on average, was €40, and the most common value was €15 000.
However, the Central Bank of the Netherlands (De Nederlandsche Banks – DNB) expects that more and more people will have to pay interest on their savings in the near future. The reason for these unattractive conditions is the low (and even negative) interest rates set by the European Central Bank - ECB (European Central Banks - ECB) for the commercial banks themselves.
The decline in these rates began back in 2014, when it was planned that negative rates would motivate banks to invest more in the economy through lending and investment. However, given the same low interest rates and growing savings, this "stick method" did not bring the desired result.
Now the banks themselves have to pay for keeping the required reserves at the ECB, and they need to somehow reimburse these costs. For credit institutions, such a step is forced in order to preserve the ability to service customer accounts in principle.
However, don't despair! At the moment, there are several ways to “get around” negative rates. For example, you can distribute your savings to different accounts in the same bank (in some banks this "trick" will not work, but in ING-bank it is still possible, since they consider the threshold amount not for each client, but for each account). In addition, you can distribute funds to different banks or transfer your deposit from a large credit institution to a smaller bank. Remember that all deposits up to 100 euros are insured by the state, so you don't have to worry about their safety.
More information about current interest rates for individuals can be found HERE, and for business accounts - HERE
In addition, as an alternative to a savings account, you can consider a family bank (familiebank is when, for example, parents issue a loan to children at a certain interest rate) or investing in securities. The most important thing is to let your savings work for you!
If you have any questions about the materials of this article, about the procedure for opening bank accounts, about the administration of bank and cash operations, or any other topic, be sure to write to us in the chat on the website or call us.
Our experts are always happy to help you!
Publication Date: 26.04.2021
