Banks are making more and more money by lending the money in our savings accounts. While the interest on our savings is meager. Would you like to receive more savings interest? To achieve this you have to cross some thresholds and possibly national borders.
The profit that banks make on borrowing and saving is greater this year than in the past fifteen years, according to DNB figures this week. Because banks increase interest on savings accounts more slowly than on loans, they have more money left over. The fact that interest rates are rising slowly is partly because customers do not easily move their buffer to another bank.
This week, ING announced an interest rate increase to 1.5 percent for a savings sum of 10,000 euros. Above that, the interest is 1.25 percent. ABN AMRO also recently increased the interest rate to 1.5 percent (up to an amount of 1 million euros). Rabobank remains ahead of the two major competitors, with a recent increase from 1.5 percent to 1.7 percent (up to an amount of 20,000 euros).
In lists with available savings interest rates, there is quite possibly a better return available. Up to a maximum of 3.25 percent. What is striking is that banks from Italy, Sweden, Spain and Estonia offer the highest interest rates to Dutch customers. You don’t have to travel that way for that. Many of these foreign parties are available via the European savings platform Raisin.
Curious about higher interest rates
Although many savers remain loyal to the major banks. they are curious about alternatives that offer more interest. Comparison site Independer has noticed that people have been comparing savings interest rates, especially since the summer.
“We have the highest interest in savings interest rate comparisons since 2013,” says Guido Rodenburg, money lending expert at Independer. “Of the people who come to compare, three-quarters click on the offer from foreign banks. They offer the highest interest rates.” Independer does not consider offset accounts of investment accounts (which also offer up to 3 percent interest).
Not everyone takes the step to a foreign bank
Raisin announced this summer that 100 million euros per week flows from Dutch savers to foreign banks via their platform. A large amount, but Dutch savings accounts held no less than 368 billion euros last year.
According to Independer, most visitors look at foreign banks, but half still choose a Dutch bank. Rodenburg: “It seems as if they see a barrier to choosing a foreign savings bank. There are no major obstacles, but you may have to pay withholding tax in the country where you save.”
“You can sometimes apply for an exemption for this or offset the tax against what you pay in the Netherlands. You may also have to wait an extra day if you want to withdraw money. This is different from the large Dutch banks, where the money is immediately deposited into your checking account when you transfer it.”
Threshold depends on the amount of savings
If savers do choose a Dutch bank, they will go for discounters such as NIBC, LeasePlanBank and bunq, according to Rodenburg. “They don’t come to us to compare the interest rates at ING or Rabobank.”
Rodenburg calculates that on an annual basis you can add 88 euros more interest to the Italian Banca Progetto with a savings sum of 5,000 euros than to ING or ABN AMRO. “With smaller savings amounts, the threshold for moving abroad may be too high. Maybe people will make that effort if they can move more savings.”