The savings interest is historically low. Will this decrease continue and will we pay for our savings? Read our savings interest expectation.
Savings interest historically low
The savings interest has been falling for some time. We are going out for the year with an average savings rate of just under 0.4%. A historically low savings interest for the freely withdrawable savings account.
Why does the interest rate fall?
The savings interest rate is largely determined by the policy rates of the European Central Bank (ECB). The central bank is the most important banker for consumer banks. With the deposit rate, the ECB determines how much it yields (or costs) for banks to store money. The banks charge this market interest rate to the consumer.
The Eurozone has been struggling with low inflation for some time. This means that prices are not rising sufficiently to meet the growth forecast. In an attempt to boost spending, the central bank makes saving unattractive by lowering the policy rate.
Similarly, borrowing is made attractive by the ECB, which results in low mortgage rates and low interest rates for consumer credit.
Savings interest expectation
New round interest rate cuts
In March 2016, the European Central Bank stepped up the crisis measures. The most important ECB rate for savings interest has also been further reduced. All banks then adjusted their savings rates to the new policy rate. The average savings interest rate fell to 0.53% in the third quarter. A year ago this was 0.93%.
We therefore expect savings interest rates to remain at the current low levels and possibly fall slightly further.
Striking: at the beginning of November, the number of banks at the top of the savings interest overview lower their rates. for example, in November and December, Nederlanden Nationale lowered the highest savings rate in the Netherlands. However, this does not seem to be a direct reason. It makes clear that the savings banks pay close attention to each other.
Savings interest negative in 2017?
The deposit rate of the ECB has been -0.4% since March (a negative interest rate). This means that banks pay a fine when they deposit money at the central bank. However, we do not expect that consumers will soon have to pay for their savings at the bank. The Dutch savings rate is relatively high and the interest rate cut is too limited for that. Savings interest is also still an important source for financing the banks (money to borrow again). However, the savings interest rate in 2016 will be close to 0%.
Choose a higher savings interest
Do you still save with a large bank? Then you can double your savings interest . You can (partly) transfer your savings to another Dutch savings bank for a higher interest rate. This is simple and free: you open an account and deposit the savings from one savings account to another.
Other ways to increase the interest rate are:
- Fix your savings temporarily.
- Opt for saving with conditions.
The future of saving
The Dutch have traditionally been real savers and we are happy to be rewarded for this virtue. By saving, however, you get money from the economy that is needed to keep it going. Is it logical that keeping your money safe is free of charge? And what are alternatives to saving, for example, should we start investing? These are questions / discussions that we will also hear more often in 2017. What is your opinion? Leave a comment under this article.