The savings rate is currently at the lowest point since 2008. Nevertheless, the savings rate is still falling, Euro Lend expects from a comparison site. “The savings rates in the Netherlands are relatively high in relation to the money and capital market rates. Banks use high margins on top of the market interest rates because they desperately need the savings to finance their mortgage portfolio, “says Lender.
The highest savings rate?
According, the reason that savings rates are much higher than market interest rates is that banks desperately need the money from savers to finance their outstanding mortgages. The Dutch have the largest mortgage debt in all of Europe. That is why banks need the savings to finance these mortgages. However, the savings balance of all Dutch people is by no means sufficient to cover all mortgages. That is why banks also have to rely on other banks and on investors.
However, Dutch house prices have fallen sharply lately. As a result, investors and other banks consider the risks of investing in Dutch mortgages too high. “This makes banks more dependent on savings for financing the mortgages,” says Lender.
Savings interest forecast – Increasing margins
Because banks are so dependent on savers, they use relatively high savings rates. Figures from website comparator show that margins have increased considerably lately. For example, the average interest rate for saving on a freely withdrawable savings account is currently 1.64 and 1.55 higher than the 1-month and 3-month Euribor (the rate at which a large number of European banks borrow money together). For comparison: the difference over the past three years was 1.49 and 1.27 percent on average.
Savings interest expectation – Further decrease
Savings interest rates have fallen sharply in the first part of 2013. This has already caused the margins between savings rates and market rates to decrease. “But because the margins are still relatively high, it is expected that savings rates will fall further in the coming months,” said Lender.
Also expects savings interest rates to fall further in the coming months. “We do think that they will pick up slightly towards the end of the year, so that savings rates will be at about the same level at the end of the year as they are now.”