National Bank Removes Fidelity Premium on Savings Accounts

In response to the debate over low interest rates for savings accounts, Economy Minister Pierre-Yves Dermagne has called on the Belgian Competition Authority (BMA) to investigate banking services, including savings interest rates. The BMA found that there is insufficient competition among the four major banks and recommended that they discontinue unclear basic rates and loyalty premiums. Dermagne advocated for a single interest rate for savings accounts to make it easier for consumers to compare options.

Following the BMA’s recommendations, Dermagne sought advice from the National Bank and financial supervisory authority FSMA. In a letter to Dermagne, bank governor Pierre Wunsch did not oppose the abolition of the loyalty premium, calling it a “good starting point to consider measures that could increase transparency and mobility of customers in the savings market.” However, Wunsch also warned about the potential impact on banks’ stability if the premium were eliminated without a transition period. The National Bank emphasized that savings accounts are an important source of financing for loans to households and companies, and suggested alternatives such as simplifying the loyalty premium system or reducing the acquisition period from twelve months to six months as a transition period.

The debate around interest rates being too low for savings has led Economy Minister Pierre-Yves Dermagne to request that the Belgian Competition Authority (BMA) look into banking services, including savings interest rates. The BMA’s investigation found that there is insufficient competition between the four major banks and recommended that they discontinue unclear basic rates and loyalty premiums. In response, Dermagne advocated for a single interest rate for savings accounts to make it easier for consumers to compare options.

Dermagne sought advice from both the National Bank and financial supervisory authority FSMA after following BMA’s recommendations. In his letter to Dermagne, bank governor Pierre Wunsch did not oppose eliminating

By Editor

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