Highest interest rates for fixed-term deposit savings falls below 4 percent

Savers wanting to lock up interest rates for fixed-term deposit accounts will now receive a lower interest rate than before. The highest interest rate dropped back below 4 percent for savings accounts where money may not be accessed for a specified period of time.

It is the first time the rate has been below 4 percent since June 2023, according to financial comparison site Geld.nl. By lowering this interest rate, banks are signalling their anticipation that the European Central Bank (ECB) will probably lower its rates later this year, explained expert the website’s analyst, Amanda Bulthuis.

“Because investors have been confident that inflation will decline and remain low for some time, capital market interest rates have also been lower for some time,” she wrote.

Interest rates on savings deposits have been falling since November, but the decline accelerated in January. Since then, several banks have lowered their deposit rates every day, the comparison site noted. “We expect deposit rates to decline further in the near future,” Bulthuis said.

The ECB had previously raised its interest rates significantly to combat high inflation. As a result, inflation is now much lower than at the peak in 2022. Interest rates may fall again this year, but the central bank has thus far been cautious about indicating exactly when this could happen.