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Why you should not leave 100,000 euros in your savings account |  cash

Why you should not leave 100,000 euros in your savings account | cash

Spaargids.beSantander Consumer Bank has launched the best paid savings account on the Belgian market. As a saver, you will get a compensation of 0.65 percent, provided you have €125,000 in your savings account. But is it wise to put such a high amount into your savings account? And why some banks encourage it and others advise not to do it? Spaargids.be Discover it.

Written by Johan van Getty, in association with Spaargids.be

Last updated:
03-04-22, 11:00


Action He was the first bank to throw bats into the chicken house. From July 1, 2021, private clients can put a maximum of €250,000 into their traditional savings account. Anything above it is immediately transferred to a checking account at 0 percent interest. And if you have more than 250,000 euros in your checking account, you will even have to pay a penalty interest of 0.50 percent.

BNP Paribas Fortis This will follow on April 1, 2022. From then on, you can also put €250,000 into a traditional savings account at the country’s largest bank. Anything beyond that is transferred to a so-called unstructured savings account. This is an account on which the bank does not have to pay the legal minimum interest of 0.11 percent.

Bee Triodos Bank, which only offers unstructured savings accounts, interest equals 0 percent. If the amount in the account exceeds €500,000, the institution applies even a penalty interest of 0.50 percent.

Some other banks only work with a cap. Bee Argentina The total amount that customers are allowed to have in their savings accounts is 2 million euros, on AXA BANK 1 million euros. and with Bank of Europe 500,000 euros per account. Bee medirect That is, according to the savings account, 50,000 or even 30,000 euros. There is no penalty here.

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KBC Keep the door open. The institution has included a requirement in its regulations that it may set a different interest rate for the total balance in the account once it exceeds €100,000.

Why do banks do this?

This reason is very clear. If financial institutions cannot fully convert the savings they attract into loans to other customers, they should stop the surplus with the European Central Bank. They are currently paying 0.50% penalty interest. They simply pass that bill on to their customers.

However, the opposite also exists. join Santander Consumer Bank On the Vision Max Account An amount between €125,000 and €200,000, then you get 0.25 percent basic interest and 0.40 percent trust premium. If you leave your money for a year, you will receive a return of 0.65 percent on its savings at an unchanged interest rate, the highest offer currently available on the Belgian market. Anyone who saves less or more will see the prime rate drop to 0.05 percent.

Compare the highest interest savings accounts here

Is it smart to put a lot of money in a savings account?

However, is it wise to put a lot of money in a savings account? One thing is for sure. Whoever does that will get poorer. In February, the inflation rate in our country was at least 8.04 percent.

In other words: for a basket of goods for which you paid €100 last year, you actually have to pay €108.4. Anyone who had €100 in their savings account and earned the legal minimum interest of 0.11 percent – which is the case with the majority of savings accounts – has seen their balance grow to €100.11. In other words, its purchasing power has decreased dramatically.

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Investing as an alternative

If you want to preserve your purchasing power, you must therefore take a different approach. In concrete terms, this means the transition to investment formulas, which allow you to achieve a possible higher return. But it is better not to do it blindly. The jumps that took place in the stock exchanges in the past few days once again proved that financial markets can not only go up, but can also drop sharply. So the message is to become entangled. You can do this with investment plans, in which you invest an amount periodically – for example every month. While this won’t stop you from seeing your investments go down in bad times, you won’t be investing all of your money in the stock market when it’s at its highest.

See here the investment plans currently offered by banks

What are the benefits of a savings account?

However, it is wise to keep a significant amount in your savings account. First, assets of up to 100,000 euros per person are protected by the deposit guarantee system. In the event of a bank bankruptcy, this system ensures that customers get their money back. If it comes to €125,000 and this is your only balance in the bank, you can lose at most 20 percent of your investment.

Please note: Credits at Santander Consumer Bank are covered by the Spanish Deposit Guarantee System.

Moreover, savings accounts are not subject to stock market fluctuations. Even if inflation is now eating away at some purchasing power, you can avoid bigger setbacks in the financial markets at times. This is important if you definitely need money in the relatively short or medium term, for example to buy a car or as a special contribution to buy a house.

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This article was brought to you by our partner Spaargids.be. Spaargids.be is an independent comparison of banking products looking for competitive rates and better interest rates.