New white smoke from the European Central Bank (ECB). After an initial drop in its key rates on June 6, the Frankfurt institution did it again this Thursday, September 12, with a new reduction of 0.25%. For individuals, this is both good and bad news: on the one hand, they can expect a drop in the cost of their mortgage in the coming months, on the other, it also means that some of their investments will be less profitable.
The ECB’s policy has a direct impact on savings yields, and in particular on short-term products distributed by banking players, such as super savings accounts and term accounts. Among the three main key rates, the deposit rate determines, for example, the interest rate at which the Central Bank remunerates the capital deposited with them by banks. Thus, when the remuneration of their deposits falls, they logically pass this on to the rates that they themselves can offer to their customers.
In anticipation of today’s decision, banks have already lowered the interest on super savings accounts and term accounts since this summer: last June, the best annualized rate on the market (the Livret Distingo) could still go up to 3%, while it is currently 2.75%. And in the coming months, this maximum rate could even go down to 2.50%, to roughly equal the future rate of the Livret A, expected (…)
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