Private ING customers with a balance of up to EUR 100,000 will no longer receive interest on the balance on their savings account from 1 January 2022. The bank has announced that the interest on savings for this group of customers will be reduced from 0.01 percent to 0.00 percent, or nothing. In a statement, ING states that the change ‘is a result of market conditions, developments in market interest rates and savings behavior of customers.’
ING also states that saving behavior has changed considerably in recent years. Due to corona, both private individuals and business customers have started to save much more, and the demand for loans from both groups has actually decreased, according to the bank.
How exactly does that affect this change? Since September 2019, banks are obliged to deposit surplus savings with the European Central Bank. Banks currently pay 0.5 percent negative interest on this. In other words, it costs the bank money to store the savings. And that is passed on to customers.
Previously negative interest rates for wealthy customers
Incidentally, more wealthy customers with a savings balance of more than 100,000 euros were it’s your turn since July 1, 2020: both Rabobank and ING charged these customers a negative interest of 0.5 percent from that date.
For customers with a lower balance, ABN AMRO was the first bank to set the interest rate to zero. That happened in January 2020. RTL News knows how to tell that the other two large banks in the Netherlands – Rabobank and ASN – do apply an interest rate of 0.01 percent for the time being, although they do express the expectation that it remains to be seen how long that will remain the case.
Read the full statement from ING here
ING has on the website posted a statement regarding this change. You can read this below.
As of January 1, 2022, ING will adjust the interest rate for private customers. Private customers will then no longer receive interest on balances up to and including € 100,000 per account. This is now 0.01%.
Business customers have not received interest up to and including € 100,000 for a long time. The change is a result of market conditions, developments in market interest rates and customer savings behaviour.
Change in saving behavior
Savings behavior has changed considerably in recent years, partly due to the consequences of Covid, consumers and companies have started to save more. At the same time, demand for loans from businesses and consumers has been limited in recent years.
Lower interest rate environment
Savings are an important source of financing for banks for the loans they provide to companies and private individuals. Due to the lower interest rate environment, this has happened at an average lower interest rate in recent years.
However, to ensure that customers can always withdraw their savings, a bank does not lend out all the savings for a longer period of time. Part of the savings is invested in the money and capital markets.
Due to the market conditions, an increasing share is being deposited with central banks such as the ECB, which charge a negative interest rate on it. ING and other banks pass on these developments in their rates.
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Source: ING / RTL News
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