No negative rates for clients with deposits below 100,000 euros

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Interest rates on savings in Europe are historically low. One of the reasons for these low rates is that banks in the eurozone park their excess cash with the European Central Bank (ECB) and that the ECB charges a negative interest rate on these deposits (currently -0.5%). The ECB is also keeping market interest rates low, providing banks with inexpensive loans and it has an extensive bond buying programme. Together, these factors have been pushing savings rates (and mortgage rates) down for some time now.

At the same time, we are seeing that interest rates on savings in the Netherlands are under even more pressure as savings have kept growing in recent years, including those of many ABN AMRO clients. This may be explained by growing prosperity, an ageing population and uncertainty about pension funds in the Netherlands.

These developments have resulted in low savings rates for ABN AMRO’s clients. The interest rate for the bank’s instant access Direct Sparen savings account is currently 0.01%. Moreover, the bank has been charging high net worth individuals and large corporates negative rates for a while.

The low, and in some cases negative interest rates are a broad concern in the Netherlands as well as in the rest of Europe. Clients are concerned.

ABN AMRO wants to dispel these concerns as much as possible. The bank has looked at the group of clients whose deposits are under 100,000 euros, the threshold of the Deposit Guarantee Scheme, and has determined that the vast majority of ABN AMRO’s client deposits are below this threshold. ABN AMRO has decided not to charge this large group of clients negative rates in the coming years.

Unfortunately, ABN AMRO cannot comment at this time on any future rate moves impacting clients that are not part of this group. Under competition law, this is permitted only after an official decision has been taken on it.

For more information about ABN AMRO’s 2019 Q3 results please watch this video with Kees van Dijkhuizen


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