Finance Minister Heinen is giving banks a year to better inform their customers about how savings interest rates are determined. He wrote this in a letter to Parliament in response to a report by the Netherlands Authority for Consumers & Markets (ACM) earlier this year . In this report, the ACM concluded that Dutch banks pay their customers relatively low savings interest rates because there is too little competition.
The report did not show that there were any prohibited agreements between the banks. But the four largest (ING, Rabobank, ABN Amro and de Volksbank) do keep a close eye on each other’s rates. According to the ACM, they tacitly coordinate them with each other. This keeps the interest rates low for many customers.
A ‘switching threshold’ is that customers at the large banks do not have the option of only opening a savings account. They are required to also open a current account at the same bank. The minister wants to investigate this construction, also known as tied sales, and possibly prohibit it.
A ban could lead to banks ceasing to offer free savings accounts. The costs for current accounts could also increase. The savings interest could even be lower due to a ban, the minister writes. He wants to investigate this.
Foreign banks
If people still want to open a savings account, they are now often dependent on smaller or foreign banks. The interest rates are often higher at the latter, but the willingness to switch is low. This also has to do with a lack of trust, the ACM wrote in its report.
People wonder whether their money is safe there. Good information about the deposit guarantee scheme plays a role in this, says the minister. “That is important to increase consumer confidence in (foreign) banks.” If more savings are deposited in foreign banks, more pressure can also be exerted on Dutch banks.
Since 2004, various banks have offered a switching service to make switching to a new current account easier. Since 2014, this service has also been mandatory for current accounts, but it does not yet exist for savings accounts. The minister is still in talks about this.
For now, he is giving banks the chance to inform their customers about how savings rates are determined. If they fail to do so, legal measures will follow to improve this. “I will assess that in a year.”
