Saving abroad: high savings, but less flexible
The range of European savings deposits is increasing. The higher savings interest rate with which foreign banks attract Dutch savers has a downside.
More Dutch people save abroad
The range of European savings deposits has grown in recent years. With a higher savings rate, foreign banks try to attract Dutch savers. Via saving platforms they can easily open a savings deposit across the border, completely online and in Dutch.
Higher savings interest across the border
Saving abroad has therefore become attractive and easy. This appeals to the Dutch saver. They have seen their savings rates plummet to a historically low point in recent years and it is expected that they will remain low for a while.
Due to the low interest rates and the wide range, the savings on long-term deposits are currently growing faster than on daily withdrawal savings accounts. With 11.5% and 6.7% respectively, according to independent market researcher MoneyView
When do you opt for deposit-saving?
Whoever opens a deposit account must take into account that you cannot withdraw the deposit immediately. In exchange for a higher savings interest, your savings are fixed in the deposit for a certain time.
Deposit savings is therefore made with savings that you do not need immediately. And by aligning the duration with the savings goal, you can get your savings back in time. Plus a nice interest!
Foreign savings banks are less flexible
In the event of unforeseen impactful events, it may still be necessary to withdraw your savings. You should think about death, disability, unemployment or debt restructuring. At most banks you can end the savings deposit prematurely at such a time. In the event of death, this applies to all banks.
At Dutch banks, the early termination of a deposit in the event of unforeseen impactful events is increasingly free of charge. They respond to the call from the Netherlands Authority for the Financial Markets not to raise ‘unnecessarily high thresholds’ at such a moment.
Yet most banks still charge fees if you end a deposit early, even in the event of unforeseen impactful events. Foreign banks are the least flexible in this regard. Research from Good Finance shows that it is not possible for 10 of the 12 deposits to terminate them free of charge.
Even in the event of your death, you will receive your investment back, but you will lose the accrued interest. The higher savings interest rate therefore has a downside. It is therefore advisable to first read the conditions before you open a deposit.