Belgium brings in billions in savings, while banks lower interest rates 14:42 in Abroad , Economy Belgians invest almost 22 billion euros in government bonds. But for now, savings rates will remain low.

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Vincent Van Peteghem
NOS NewsAmended
  • Ruben Eg

    editor Economics

  • Ruben Eg

    editor Economics

A “strong signal” and “a clear call for respect from Belgian savers towards the banking sector”. Belgian Finance Minister Van Peteghem yesterday proclaimed victory over his alternative to the meager savings rates in his country.

Via a ‘government bond’, as bonds are referred to in Flanders, Belgians could lock up their money with the government for at least a year, at an interest rate of 2.81 percent.

More than 634,000 Belgians invested almost 22 billion euros in a government bond in one week, the Federal Debt Agency announced. That is almost 7 percent of the money that Belgian savers still had on deposits with banks last week. These banks even had to recruit extra employees for their call centers last week to help customers who wanted to buy ‘state bonds’ – the plural of state bond – through the bank.

But now that the dust has settled, there is also criticism. Because has the Belgian government now solved a problem? Or has a new problem been created with these government bonds? For example, the newspaper Het Nieuwsblad noted this morning that the banks have not panicked at all about the leaking savings. In fact, there are banks that are lowering their savings interest rates.

Temporary offer

A tour of the newspaper shows that Axa, Argenta, Beobank and Deutsche Bank have withdrawn a temporarily higher interest rate of 2.81 percent on a one-year term account, the same interest rate as a government bond. “A temporary offer”, the banks respond.

Meanwhile, there are no signs at larger banks such as BNP Paribas Fortis and ING that they want to do anything about their interest rates. In a regular savings account it remains around half a percent. “You can see that mainly smaller banks have temporarily raised their interest rates”, Van Peteghem had to admit to the VTM channel.

For that reason, the minister does not seem to want to let go of the interest on savings in Belgium. Van Peteghem came up with the government bonds after coalition party Vooruit had argued for a law that obliges banks to link the interest on regular savings accounts to the level of the policy interest rate at the European Central Bank. In a press statement, Van Peteghem states that banks must now heed the signal from dissatisfied savers.

“People can therefore count on the government to closely monitor this file in the coming period to ensure competition within the banking sector,” he alluded to a second round of government bonds. It may come in December.


In the meantime, Van Peteghem still has to figure out what he will do with the 22 billion euros raised. The minister states that this year 10.4 billion euros less in government bonds needs to be issued.

It is a fact that the treasury has to pay back 22 billion euros to savers with a government bond in a year’s time, plus more than half a billion in interest. In order not to incur a loss, the Belgian government seems to have to invest the money somewhere.

The Netherlands

In Belgium, savings interest rates are considerably lower than in the Netherlands, where the major banks now offer 1.5 percent interest on a freely withdrawable savings account. Nevertheless, the House of Representatives also voiced strong criticism this year of savings interest rates and the high profits of banks.

Last week, a spokesman for the Ministry of Finance stated that a comparable Dutch bond is not an option. Over the past few months, outgoing minister Kaag, in talks with the major banks and the Dutch Banking Association, has drawn attention to their social role in the level of interest rates on savings. Kaag emphasized that the slow pass-through of the ECB interest rate “raises questions”, she recently wrote in a letter to the House of Representatives.

Banks promised Kaag that they will try to explain better why the savings interest rate does not rise one-to-one with the ECB interest rate. “In the coming months I will continue to pay attention to developments in the market and with regard to the savings rates of banks. I will also expressly take into account developments from an international perspective,” concludes Kaag.

  • Belgians invest their savings en masse in government bonds: ‘It’s about the principle’
  • Abroad

  • Economy

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