by Niels Saelens
published on Monday, February 5, 2024 at 7:47 PM •
4 min read
Although savings interest rates rose last year, we withdrew massive amounts of money from our savings accounts. This is evident from figures from the National Bank of Belgium (NBB). Why is the traditional savings account losing popularity?
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Why is this important?
Due to the tightening monetary policy, we receive higher compensation for our savings efforts. Yet many Belgians sought other horizons last year. Consider, for example, the one-year government bond that the government issued in September.
In the news: The balances on regulated savings accounts have fallen by 31.4 billion euros to 268.9 billion euros in 2023.
But: Not all banks saw their deposits shrink.
- The internet bank Medirect, for example, saw the number of savings deposits increase by 50 percent, according to an earlier survey by The time early this year. After all, that financial institution offers some of the most lucrative savings accounts.
- Anyone who has money in the Essential Savings account receives an interest of 2.8 percent. You can park a maximum of 25,000 euros in that savings account.
- Fidelity Savings is accompanied by a savings fee of 2.55 percent. There are no savings restrictions with this formula.
Why are Belgians withdrawing their savings?
Explained: The Belgians started looking for alternatives in 2023.
- They received help from the government. The government issued a one-year government bond last summer. Because the withholding tax was exceptionally reduced from 30 to 15 percent, the net return amounted to 2.81 percent.
- The aim was to encourage banks to (further) increase savings interest rates. At the time of its issue, the government bond was more profitable than any savings account. Our country now has five savings accounts that yield at least 3 percent.
- The government was able to raise just under 22 billion euros with the issuance of the one-year government bond, a record amount.
- In all likelihood, the government will also issue a one-year government bond this year. The banks are certainly not in favor of this. At the very least, they want the government to abandon the favorable tax regime with the next issue. “If a company or bank issues a product (for example a bond loan, savings certificate or term account) with the same term, this must be done under identical tax conditions. We hope that this principle will be adhered to when a new government bond is issued,” the banking federation Febelfin recently said.
- The Belgian government has until the end of June to launch a new tax-friendly government voucher.
- Furthermore, savers also paid more attention to other savings products, including term accounts.
- During the subscription period for the government bond, some banks had temporarily increased the net interest on term accounts with a term of one year to 2.81 percent, or slightly more.
- Furthermore, billions were also invested in bonds. Due to the ECB’s tightening monetary policy, these investment products yield more.
2024-02-05 18:47:26
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