Mapped: How negative rates are affecting savings returns across Europe – Telegraph.co.uk

8 months ago Comments Off on Mapped: How negative rates are affecting savings returns across Europe – Telegraph.co.uk

At a national level, he said that differences between countries’ local interest rates were also linked to “current account balances and the need of the banks for capital”.

According to Mr Vanden Houte, in countries such as Spain and Portugal, where the amount being saved by individuals is low, banks are in need of capital so are forced to offer higher rates. But in countries such as Germany, Belgium and Luxembourg, banks are inundated with cash. As banks place their excess cash into the European Central Bank where the rate is negative, there is significant downward pressure on the rates being offered to savers in these countries.

He added: “For the small saving deposits, of course, banks are cautious about lowering rates by too much – but even there the trend is very much down across the board.

Does the data show it all?

Those who have searched for accounts in Britain’s savings market over the past year would be right to point out that their experience suggests a worse fall in rates than the map suggests.

The data is the average of the whole savings market, so while the top rates in the UK have dropped quickly, it could be that the whole market average has seen a more steady decline. It also only runs up to February, which is when some of the most pronounced of the recent rate cuts began.

Separate data from the Bank of England appears to show a more pronounced decline across easy-access accounts, cash Isas and fixed-rate bonds, so there are likely to be either differences in methodology or reporting delays involved with the data used above.

Mapped: How negative rates are affecting savings returns across Europe – Telegraph.co.uk