Savers get extra 0.25 percent interest in Belgium

1st August 2008, Comments 0 comments

The maximum basic interest on savings accounts will be increased to 4.25 percent on 5 August.

1 August 2008

BELGIUM - The maximum basic interest on savings accounts is to be increased to 4.25 percent.

Much anticipated by the smaller banks, the new interest rate will come into effect on 5 August, although consumer organisations warn the increase is just too meagre.

At present, banks are restricted to offering a basic interest of just 4 percent. Smaller banks were keen to raise their basic interest rate, especially so now that many of the large banks are offering a 4 percent interest rate on their online accounts.

Following the earlier announcement by Finance Minister Didier Reynders, the measure is to be confirmed by Royal Decree on Tuesday.

From Tuesday, banks will be allowed to offer maximum 2 percent extra on top of the basic interest of 4 percent by means of a growth and loyalty premium. The upper limit for premiums is to rise from 2 to 2.12 percent.

The consumer watchdog organisation Test Aankoop isn’t impressed by Reynders move and says the 0.25 percent increase falls short.

“Obviously, any increase is welcome but this really is a meagre gesture. Smaller banks are prepared to offer much better deals than 4.25 percent. With inflation coming close to 6 percent, small savers are actually losing out on their savings account,” Ivo Mechels of Test Aankoop says.

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