by Niels Saelens
published on Wednesday March 27, 2024 to 19:38 •
4 min read
The internet player Santander Consumer Bank recently increased the interest on one of its savings accounts, but left the rates of its most lucrative formulas unchanged. It remains fairly quiet at the other banks. It is almost certain that savings rates have reached a peak.
In the news: Santander has increased the interest on the Vision account from 1.85 to 2 percent.
- This is the bank’s least lucrative account. Those who park their money in the Vision+ savings account receive 2.85 percent.
- Vision Max comes with a savings fee of 3 percent. However, this interest only applies to those who save between 125,000 and 300,000 euros. In all other cases it drops to 1.85 percent.
Zoom out: Not much has changed at the top of the savings market since the launch of VDK Bank’s Rhythm Savings Account. This savings account was launched in January and, with an interest rate of 3.15 percent, is the most profitable savings formula. You can set aside a maximum of 500 euros per month.
- Almost half of savings accounts for adults (25 out of 57) carry an interest rate of at least 2 percent. Five of those accounts bring in at least 3 percent.
- This usually concerns formulas from internet banks or accounts offered by traditional players on top of regular savings accounts, which usually give you an interest of 1 percent or less. This is the case, among others, with the regular savings account of BNP Paribas Fortis (0.75%), KBC (0.9%) and Crelan (0.9%). ING is one of the exceptions. The traditional savings account from that financial institution yields 2.25 percent.
What can we expect?
Outlook: There is a good chance that savings rates – together with the policy rate of the European Central Bank (ECB) – have reached a peak.
- During the latest interest rate meeting, the board members of the monetary institution pressed the pause button for the fourth time in a row, as a result of which the deposit interest rate – the compensation that banks receive on the capital they deposit with the ECB – remains stuck at 4 percent. A further increase in interest rates seems very unlikely. Only a sharp rise in inflation can force the central bank to do so.
- ECB President Christine Lagarde hinted at a first cut in June during an explanation of the interest rate decision. But as always, she emphasized that much will depend on the available data, including the inflation and jobs report.
- A policy change will most likely result in less generous savings allowances. In this way, banks can more or less maintain their profit margins, while mortgage interest rates will also fall. The difference between the mortgage interest and the savings interest is one of the most important sources of income for (traditional) banks.
- Do you know: During the ECB’s flexible monetary policy, financial institutions were annoyed by the Belgian obligation to pay at least an interest of 0.11 percent to customers with a regulated savings account. While there is no limit on how far mortgage interest rates can drop. Since the start of the tightening monetary policy in 2022, they have been able to raise those interest rates significantly, resulting in higher interest margins.
Do you want to stay informed of everything that is happening in the financial world? Niels Saelens, a journalist with a passion for finance, follows everything closely. You can subscribe to his daily newsletter via this link.
