gull“There were still some interesting offers (…). But even there, the success does not seem massive. It’s a problem with the mentality of the Belgians, savers are passive.”
The observation is clear: Belgium is not at all competitive on traditional regulated accounts. However, it fares better on term accounts, that is to say those from which savers must wait a certain period before withdrawing their money.
The classic “sacrificed” saver
In November 2024, Belgian banks offered an average rate of 1.03% on regulated savings deposits, a figure therefore significantly lower than that of other eurozone countries. By comparison, this rate reaches 2.89% in Luxembourg, 2.56% in France, and 1.45% in the Netherlands.
Although the Belgian rate has increased slightly compared to previous months, the gap with neighboring countries remains significant, which penalizes Belgian savers.
State bonds, a record raise: have banks been making fun of consumers for too long?
On the other hand, Belgian banks stand out for their greater competitiveness on term deposits, with an average rate of 2.69%. They are at a level comparable to that of France (2.78%), Luxembourg (2.71%) or the Netherlands (2.6%). This strategy aims to attract more dynamic savers, says Eric Dor. These being more limited in number, this represents less “risk” for the banks. In November 2024, term deposits reached, for example, 149 billion euros in outstanding amounts, compared to 272 billion for regulated savings deposits.
“There were still online banks which offered more attractive rates than the other 4 major banks: BNP Paribas Fortis, Belfius, KBC and ING. Like MeDirect for example. But even there, the success does not seem massive. It’s a problem with Belgian mentalities, savers are passive. Banks can tell themselves not to compete in the segment of passive savers, a source of abundant financing at low cost, and to be more competitive only in the segment of more dynamic savers. Which is understandable from them“, continues the economy. “We even saw it with the state voucher the Vincent Van Peteghem (outgoing Minister of Finance, CD&V) with the withholding tax reduced to 15%. He mobilized 20 billion euros, okay, but in the end, few savers are moving“, he continues.
Take inspiration from France?
In France, the “livret A”, a regulated savings account, has offered a return of 3% for years (even if this could decrease in the future). For what ? Because the State has decided to set this, with a deposit ceiling of 22,950 euros in order to protect the interests of small savers.
“Personally, I have always found that it is an idea that we could have copied in Belgium. But the banking lobby fought hard to prevent this from happening.“, lance Eric Dor.
gull“You can’t keep the same account number, just like you can keep your phone number by changing operator. Which doesn’t make you want to change banks.”
“The National Bank of Belgium mentioned recently, there are certain factors that hinder competition. Including the loyalty bonus for example. This blocks the mobility of Belgian savers. As well as the lack of portability of bank accounts. You cannot keep the same account number, just like you can keep your telephone number by changing operator. Which doesn’t make you want to change banks because it will cause a lot of hassle with your banking contacts, for example.“, he continues.
The fleeting burst of banks, the awakening of savers
Eric Dor also recalls that banks benefit from a form of indirect subsidy. Since the interest paid is exempt from taxes, this favors the banks which pay it to savers. If they were not, the banks would have to pay back more money so that savers receive this “net” interest.
“This is what was quite comical on the part of Febelfin (the federation of Belgian banks, Editor’s note). They had shouted at the distortion of competition with the Van Peteghem state bond. But the sector benefits from an exemption on all its savings accounts. It’s fair game, even if it doesn’t make sense. Let the banks plead for a removal of all exemptions then!“, he says.
gull“It’s fair game, even if it doesn’t make sense. Let the banks plead for an elimination of all exemptions then!”
“Very liberal economists also assert, and I recognize that this is intelligent, that basically, it should not be only regulated accounts which benefit from this form of subsidy/exemption. This harms the allocation of resources. Everyone should have an exemption from a certain amount of savings income. Without being limited to regulated savings accounts. This is clearly being discussed in the Arizona government agenda.“, he asserts. Even if these liberal economists do not plead for a removal of exemptions but rather a generalization.
Why the banking sector does not want the N-VA project on savings taxation
Reduced cost for home loans
However, one of the indirect advantages of these limited interest rates on regulated savings accounts is that it would allow Belgian banks to be more competitive on property loan rates, says the economist. But here again, this concerns a smaller part of the Belgian population who is ready or able to buy, therefore fewer movements in financial flows to fear on the banks’ balance sheets.
The average rate for new residential mortgages was 3.19%, lower than most other Eurozone countries, such as Estonia (4.73%), the Netherlands (3.71%) %) or Germany (3.59%). France nevertheless once again showed a more interesting rate, slightly lower, at 3.17%.
gull“Belgians are educated in this cult of security. Which explains why there is less risk-taking than in North America, for example, and less entrepreneurship”
Belgian banks are also positioning themselves more competitively on consumer loans, which are sometimes criticized because they are very costly for those who use them, often people with the least financial means. The average rate in Belgium is 6.72%, therefore lower than that of countries like Portugal (8.71%), Italy (8.45%), or Germany (8.07%). However, they remain less attractive than Luxembourg (4.54%) or even France (6.46%).
The report which dismantles the argument of Belgian banks to justify their low savings rates
To conclude, Belgian consumers therefore remain too “cold”. “It is also because of a cultural factor. The Belgian people are among the conservative people, who want security. As with the strong appetite for sheltered jobs. People are educated in this cult of security. Which explains why there is less risk-taking than in North America for example, and less entrepreneurship“, he says. “I’m not saying it’s good or bad, but it’s a less risk-averse culture. And, what’s more, a form of basic economic and financial culture is missing, some argue. We talk about the economic models of Condroz farms in secondary school“, he says jokingly, “but we see nothing, other than at the University, about Finance. It’s a shame“, term-t-il.
