Test-Achats criticises Belgian savings accounts

Belgium’s consumer rights organisation Test-Achats has launched an attack on Belgian banks' savings accounts and their dismal interest rates.

Calling them a "legal scam", the consumer group said the interest rates offered to customers are far less generous than they actually appear.

In the past few months, Belgian banks have been increasing their savings account interest rates and the loyalty premium - which is only available if the money stays in the account at least a year.

It is this second "bonus" that has caused the ire of Test-Achats, the organisation’s banking specialist Nicolas Claeys explained.

For example, ING’s Tempo Savings account carries a 2.25% interest rate, but this includes a 1.5% annual bonus.

"The client does not benefit from the loyalty bonus for a whole year," said Claeys. "This means, for the entire duration of the savings, he will never receive a 2.25% rate.

"This is completely in accordance with the law. Banks reward the saver’s loyalty. But this means that they are entitled to show a rate that does not really correspond to reality."

"This distorts the competition,” he added, pointing out another obstacle in that savers are also not allowed to deposit more than €500 in their account per month.

This means that a saver who added €200 to the ING account each month would only receive €13 in interest over the course of the first year – equivalent to a 0.98% total rate. After two years, the benefit would increase to 1.59% and after three, the interest rate would be 1.8%.

The Test-Achats criticism comes as Belgian banks face mounting pressure to raise savings rates, following repeated interest rate hikes by the European Central Bank. The latest, on 15 June, raised the deposit facility rate from -0.5% to 3.5%, which has largely not been passed on to savers.

“We need to keep raising interest rates until we see convincing evidence that developments in underlying inflation are consistent with a return of headline inflation to our 2% medium-term target in a sustained and timely manner,” Isabel Schnabel, member of the ECB Executive Board, told a conference in Luxembourg last month.

The Test-Achats result comes as consulting giant KPMG notes on its website that banking profitability is coming under “increased pressure in a sector characterised by persistently low interest rates in an uncertain risk landscape”.

However, BNP Paribas Fortis – Belgium’s largest bank – posted a profit of €3.16 billion in 2022, some 18.8% higher than in 2021.