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Global Middle Class

 10 Countries That Penalize Savers

The estimated reading time for this post is 190 seconds

Historical low-interest rates are destroying savers from Germany to Sweden.  According to a recent report from the European Central Bank (ECB), in Germany alone, 80 banks are charging negative interest rates to both their institutional and retail clients.  

Across the Atlantic, banks in the United States are paying savers one basis point or 0.01 percent on standard savings accounts.  Charging customers to deposit money has been around since 2014 when the ECB cut its deposit rate from minus 0.4 to a record low of negative 0.5%

The United States of America recovered fully from the 2008 financial crisis, but numerous countries, including Europeans, had not fully recovered from that crisis when the coronavirus hit.  The pandemic exacerbated their problems. Central banks that were already going all-in had to stretch their mandates.

Historic low and negative central bank interest rates affect savers the most. Below are ten countries with historic low-interest rates:


Having a secretive Swiss bank account is still possible, but it will cost you. The Swiss National Bank’s policy rate is at a negative 0.75 percent.  The Union Bank of Switzerland (UBS) pays savers a whopping 0.0% on a personal savings account.  The bank does charge a deposit charge on higher amounts, meaning well-heeled savers have to pay to deposit their money at UBS.       


Denmark’s interest rate on certificates of deposit (CD) is negative 0.60 percent, meaning that Danish savers are paying negative 60 basis points to lock their money in a Danish bank. Jyske Bank, one of Denmark’s largest banks, announced last year that they would charge a negative interest rate of 0.75% for all corporate deposits and private clients depositing more than 750,000 Danish crowns ($111,100).


The Bank of Japan’s short-term interest rate is at negative 0.01. Japanese banks charge corporate deposits, but individual savers get around two basis points or 0.02 percent.


The Central Bank of Sweden’s repo rate is at 0%.  The Swedish central bank is not the only central bank with a 0% benchmark rate.  Sweden is unique because its low benchmark rate comes with significant qualitative easing.  The Central Bank of Sweden promised to purchase up to SEK 500 billion worth of assets by 2021.  Skandinaviska Enskilda Banken, a major Swedish bank, pays savers 0% on savings.


Because Spain is part of the European Union, Banco de Espana does not set up the country’s benchmark rate. It follows the European Central Bank (ECB) policy.  The current ECB benchmark rate is 0%.  Banco Santander, Spain’s most prominent commercial bank, pays Spanish savers negative 0.10%


Italy is also part of the ECB, and it does not set up its benchmark interest rates. Italy is on this list because the country taxes savers 20% on the interest gained on savings accounts, but the savings accounts pay no more than 11 basis points.


Portugal is also part of the ECB, and it does not set up its benchmark interest rates. Caixa Geral de Depositos pays Portuguese savers to deposit their money


Germany is also part of the ECB, and it does not set up its benchmark interest rates. According to a recent report from the European Central Bank (ECB), in Germany alone, 80 banks are charging negative interest rates to both their institutional and retail clients.  


Belgium is part of the ECB, and it does not set up its benchmark interest rates.  The Belgium base rate is 0.01%.  The maximum amount that you can save is 500,00 euros. Banks such as BNP Paribas Fortis and ING Belgium charge negative interest rates to customers who save more than 500,00 Euros.


France is part of the ECB, and it does not set up its benchmark interest rates.  The average interest rate on French bank savings accounts is about 0.10%.  France is on this list because its household saving rate increased to 19.57 percent in the first quarter of 2020 from 15.14 percent in the fourth quarter of 2019.

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