No impact for large majority of private individual and business customers
At this moment, less than 1% of business customers and less than 0.1% of private individual customers have a balance of more than 1 million euros per account. This means that the vast majority of customers will not be impacted by the negative interest rate.
What does this mean in practice?
- For private individuals
For regulated savings accounts, ING Belgium will introduce a maximum balance of 1 million euros as of 1 January 2021. Amounts in excess of 1 million euros in a regulated savings account will be transferred to an ING current account. Interest on these accounts is 0.00% for amounts of up to 1 million euros. For balances above 1 million euros, ING Belgium will charge a negative interest rate of -0.50% on these accounts. This interest rate applies per account, not per customer. For balances of up to €1 million on regulated savings accounts (for private individuals only), the legally determined minimal interest rate of 0.11% (0.01% base rate and 0.10% fidelity rate) will be maintained.
- For legal entities
For accounts of certain business customers with very large deposits a negative interest rate has been applied since 2016. As of 1 January 2021, a negative interest rate of -0.50% will now be applied to deposits above the 1 million euro threshold.
Why are interest rates so low?
European banks have been faced for some time now with low or negative interest rates. These are a consequence of the policies that the European Central Bank (ECB) has been pursuing to stimulate economic growth in Europe. The ECB deposit rate has been negative since June 2014. This has led to a continued drop in lending rates and investment yields. ING Belgium is now passing on these market conditions to a small part of its customer deposits.
ING Belgium is informing all its customers in accordance with legal requirements.