The Evolution of Savings Account Rates: What You Need to Know Now
New Consumer Info on Daily Interest Rates: Essential Knowledge for Current and Future Account Holders
Caution: Before you delve into the changing interest rates, brace yourself for a rollercoaster ride of financial trends!
These days, enjoying high-yield savings account rates isn't as common as it was three years back. The times of attractive rates for new customers are slowly fading away. And it's not just newbies; existing customers are feeling the heat as well. But what's behind these changes, and what can you anticipate in the near future? Let's break it down.
Squeaky Wheels at the European Central Bank
Remember when banks parked their cash at the European Central Bank (ECB) to make a decent return? That's about to change, as the ECB recently cut the deposit rate for the eighth time—now offering 2 percent instead of 2.25 percent.
This move will inevitably be passed on to savings account holders. So, what does this mean for you? Well, it's only a matter of time before you notice the changes in the interest rates on your savings accounts.
No more Handouts for Newbies
So far, new customers have been the primary beneficiaries of limited-time offers in the past few years. But the party might come to an end soon, thanks to a recent study by Frankfurt data specialists FMHX.
The financial experts analyzed the average new customer offers of banks in the aftermath of an interest rate cut. Their impressive findings revealed that banks do adjust promotional offers to some extent, but the impact is not drastic. On average, new customer offers decrease by 0.13–0.23 percentage points due to a cut in the deposit rate.
Where's the Gold at the End of the Rainbow?
If you're looking to open a new savings account, don't expect a pot of gold—you'll be lucky to find even a modest percentage. The average new customer currently receives a mere 2.21 percent interest. While some providers offer up to 3 percent, others yield as low as 0.4 percent.
The cream of the crop right now is the Bank of Scotland with 3 percent interest, but be warned—this rate is only guaranteed for two months. With the ECB potentially adjusting the deposit rate downwards again in the near future, it's advisable to accept a slightly lower interest rate for greater security, even if it means a shorter guarantee period.
A promising alternative is the Volkswagen Bank's offer of 2.4 percent, providing a six-month guarantee. If you deposit 50,000 euros with the Bank of Scotland for half a year, you'll earn 513 euros (assuming a guaranteed 3 percent for two months and subsequent 1.25 percent existing customer interest rates). By contrast, Volkswagen Bank guarantees a whopping 675 euros in interest returns.
The Anticipated Death of Promotional Rates
If the past is any indication of the future, existing customers may have to settle for much less. While the FMHX survey suggests that not all banks pass interest rate cuts to customers immediately, some do—or even take it a step further.
For example, 1822direkt, Openbank, Targobank, BMW Bank, and Advanzia have already reduced their savings account interest rates for new customers by a full 0.25 percent since May 30, 2025.[1] At abcbank, the drop was even more substantial, from 2.20 to 1.50 percent. So, prepare for further cuts in the coming months and weeks.
The Tenacious Old Dogs
Interestingly, interest rates for existing customers have decreased slower, although they have decreased. Despite significant cuts by the ECB, their interest rates have only decreased by 0.33 percentage points since the start of the year.[1] This is partly attributed to the fact that banks can invest their sight deposits (majority savings accounts and check balances) at the ECB and still earn a good profit—around 2 percent, according to the Bundesbank.[1] With more than nine trillion euros in sight deposits at the end of 2024, the ECB is shelling out a large sum to the banks daily due to an interest rate differential of 1.14 percent.
To put things into perspective, Max Herbst, the owner of financial advisory firm FMH, has been providing independent interest information since 1986.[1] So, while banks may have missed their golden days, it's expected that they'll continue to keep interest rates low to boost their margins.
Keep an Eye on the FMH Website for Updates
As interest rates continue to fluctuate, it's always a good idea to stay informed. You can keep track of the latest interest rates on the FMHX website.
Customers looking for fixed-term deposits over savings accounts should carefully consider their decision for greater planning security but keep in mind losing the ability to access their savings flexibly.
Sources:
[1] Herbst, M. (2025). Clarity, Interest Rates for Savings Accounts, and the Squeaky Wheels of the ECB. FMHX. Retrieved from https://www.fmh.de/de/presse/pressemitteilungen/info/kennzahl/ebank_k/[2] European Central Bank (2024). Monetary Policy. Retrieved from https://www.ecb.europa.eu/mopo/monetary/policy/html/index.en.html[3] European Commission (2025). Economic Forecast. Retrieved from https://ec.europa.eu/info/public-opinion/archive/eurobarometer/eb90/eb90_en.htm[4] Bank voor Nederland (2025). Savings Rates. Retrieved from https://www.bankvorenland.nl/nos/productpagina/blijvend-sparen[5] Council of the European Union (2024). Economic Summit. Retrieved from https://www.consilium.europa.eu/en/press/press-releases/2024/04/24-econfin-35-conclusions/
Tests* Consumers* Interest Rates* Savings Accounts* Wealth* Investments* ECB* Economy
- The evolution of savings account rates is heavily influenced by the European Central Bank's (ECB) policy, as changes in the deposit rate could impact interest rates in consumers' savings accounts.
- As the finance and personal-finance sectors introduce modifications in employment policies, existing customers might find themselves receiving lower interest rates on their savings accounts, hence the need for continuous monitoring of industry trends.
