Less than 2% of Dutch savings are in foreign accounts, says De Nederlandsche Bank (DNB). This is despite the high interest rates offered by some foreign banks on savings deposits.
In the Netherlands, there is a great deal of unease about the relatively low interest rates offered by Dutch banks. For example, interest rates on current accounts or deposits have risen recently, but they are much lower than the interest that the banks themselves receive when they deposit money with the European Central Bank. Banks make huge profits as a result.
Some Dutch people therefore place their money in a foreign deposit account, sometimes giving 3 or 4 percent interest. However, this does not worry many Dutch people.
“We see the numbers increasing steadily, but they are limited to less than 2 percent of the total savings of the Dutch people,” says Stephen Major, responsible for banking supervision at DNB. “Most customers remain loyal to their banks.”
Total savings in the Netherlands amounted to more than 430 billion euros by the middle of this year. This means that less than 8.6 billion euros are in foreign accounts.
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Risks facing banks
Major warns banks that savers’ deposits can be “volatile”. Especially since many people nowadays transact digitally and it is relatively easy to deposit their savings elsewhere. Banks need this money to finance other activities.
“The desire for better returns on savings could tempt savers to switch to other (foreign) banks that offer higher interest rates on savings,” says Major.
He also sees other risks for banks. More and more companies are going bankrupt. They often cannot repay their loans, causing banks to incur losses. High interest rates also play a role, because companies have recently taken out loans at higher interest rates than they did a few years ago. The same applies to families.
Despite the risks, according to DNB, the banks are in a good financial position, as evidenced by the recent rise in profits. This way they earn more from payment transactions, work more efficiently and earn well from the difference between the interest they give and the interest they receive.