The average savings interest rate fell below 1% in mid-August. This means that this psychological limit is reached faster than previously predicted. Has that also reached the bottom?


Psychological limit

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At the start of the year, we already predicted that the average savings rate in 2015 would fall below 1%. In mid-August the interest for savings accounts dropped below this psychological limit without conditions. This appears from an analysis by the Telegraaf. As a result, savings interest rates have fallen faster than previously predicted.


No surprise

The fact that savings rates have already fallen below 1% is no surprise. In May, the major banks already lowered their interest rates for the freely withdrawable savings account below this limit. We then had to enter interest rate decreases one after the other in the savings interest overview each week.


Stimulate economy


The low market interest rates are the main cause of the current low interest rates. The ECB keeps policy rates low and is in the process of a debt buy-back program to stimulate the economy. Borrowing is made cheap and saving expensive , in the hope that consumption will improve in the Eurozone.

This also has positive sides: the mortgage interest and interest for consumer loans are low.


Savings not interesting

Banks are currently not interested in your savings . They have enough and cheaper alternatives to get money to borrow. In fact, if banks want to store their savings, they have to pay for it right now. Attracting extra savings is therefore unattractive.


Soil reached?

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Whether or not the bottom has been reached with an average savings rate of 1% depends on whether economic growth continues. At the beginning of 2015, this seemed to be the case with a number of months with positive inflation figures, but this stagnated in June and July. So it may just be that the poison cup for the saver is not yet empty. Also read our forecast for savings rates in 2016.

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