Savings platform Raisin stated this in an analysis on Wednesday. According to a calculation by the German financial services provider, the Dutch can collectively accrue as much as 4.5 billion more savings interest if they ‘microfix’ their money, or spread it more intelligently.
“This is even possible without necessarily having to switch banks,” says Netherlands Director Eelco Habets. According to Raisin, this amounts to about 540 euros per household.
According to De Nederlandsche Bank, the average interest on freely withdrawable savings last year was 1.5 percent. Over the past five years that was 0.7 percent. This is significantly more for money that is held for a longer period of time in a so-called deposit account.
According to the European Central Bank, short-term time deposits (terms up to one year) yielded 2.4 percent last year and 1.9 percent over the past five years. A savings sum of 50,000 euros would have yielded more than 5,110 euros in five years. So almost three times as much as in a freely withdrawable account.
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“A savings mistake,” Habets calls it, not to benefit from the higher interest on short-term deposits. He notes that in the Netherlands there are more than 400 billion euros in on-demand accounts, plus more than 100 million in current accounts. According to Habets, most of this is not necessary as a buffer to absorb immediate setbacks.
“Dutch households have enormous amounts of money on their shelves that can work much harder. With short-term term deposits, people can significantly increase their returns – without having to tie up their money for years,” says Habets.
He sees that savers mainly think about the long term when making deposits and shy away from not being able to access their money for so long. “But more and more providers are now offering short-term deposits, making saving more flexible and attractive.”
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With a term deposit you decide how long you want to put your savings away. This can be from one month to many years. However, you cannot access it in the meantime. Even if the bank allows it, you usually pay a fine for it. There are term deposits ‘with destination’ where you can withdraw money for an agreed purpose.
ABN Amro now offers 1.25 percent interest on immediately withdrawable savings, while an interest rate of 1.9 percent applies to a one-year deposit. At ING this is 1.25 percent and 1.7 percent respectively. With a longer-term deposit, you as a saver will make little extra progress. ABN Amro pays 2 percent for a two-year deposit and 2.1 percent for three years.
At Dutch banks, the maximum for the one-year deposit interest rate is approximately 2 percent. Foreign providers go up to approximately 2.7 percent, according to reports from price comparison companies.