ING Belgium is targeting bank shoppers with temporary term accounts

Just under a week after ING Belgium increased the interest on its savings accounts, the bank is launching a temporary promotion on one of its term deposit accounts. Although the offer appears to only be valid for those who invest money from an account of another bank.

ING Belgium launched a temporary promotion last week with a new six-month term account. While the bank previously offered a return of 3.29 percent on those accounts, customers who sign up until the end of November now have the prospect of an annualized return of 4 percent. Net, after deduction of the withholding tax of 30 percent, this amounts to 2.8 percent. You can register from 1,000 euros.

With the stunt, ING Belgium climbs up in the rankings of term accounts with the most interesting conditions. But savers must realize that after six months they will not receive the interest rate that the bank advertises. Because the term of the new term account is six months, the actual gross return is just under 2 percent. After deduction of withholding tax, 1.4 percent remains.

A customer who places 10,000 euros on the new term account will receive a compensation of 199.45 euros gross or 139.62 euros net after six months.

Moreover, with the new offer, ING appears to be mainly targeting money from outside. With a number of exceptions, existing customers cannot transfer money from their current or savings account to the new term account. The promotion is only intended for customers who move money from a savings or investment account that they hold with another bank to ING Belgium.

Due to rising interest rates, interest in term deposits has increased enormously in recent months. At the end of September, Belgian companies and households together had parked 73.8 billion euros in a term account, where you lock up your money for a certain period at a rate that you agree in advance with your banker. A year earlier, companies and families had invested only 12.2 billion euros in a term account, according to the latest figures from the National Bank.

With its temporary promotion, ING is responding to the overwhelming comeback of term deposits, but it is not the only player to do so. The Ghent VDK Bank offers a term deposit account for amounts from 200 euros that yields a net return of 1.51 percent over six months. Belfius says it offers net interest between 2.31 and 2.52 percent on term accounts of six to twelve months, depending on the amount. Deutsche Bank offers a net return of 2.4 percent over that term if customers invest at least 100,000 euros.

Despite the growing interest, banks are generally not eager to encourage customers to invest in term accounts with major campaigns or stunt promotions. No major bank offers an online overview of the rates it charges for its term deposit accounts. They ask customers to contact their employees.

ING is starting to profile itself more emphatically as a price breaker on the savings market. Last week, it was the first Belgian bank to increase the interest on a savings account to 3 percent. From December 1, ING Belgium will offer a total interest rate of 3 percent – the base rate and the fidelity premium – on its Tempo Savings accounts. Customers can deposit a maximum of 500 euros per month into that account and must leave their money for twelve months to receive the fidelity premium. For regular savings accounts, without a deposit limit, ING Belgium increases the total interest from 1.50 to 2.25 percent.