Your savings rate is back to zero again

It was small, and now it's back to zero again - the interest rate on major banks' salary accounts. Move your money, advises the central bank governor.

» Updated:

» Published:

Your savings rate is back to zero again
Photo: Fredrik Sandberg/TT

Share this article

A quarter of a percent, 0.25 percent. That's roughly where the savings rate on the largest banks' salary accounts, or transaction accounts, peaked. At the time, the Swedish Central Bank's repo rate was at 4.0 percent. And it took a long time, many rate hikes from the Swedish Central Bank, before the banks even considered giving any kind of interest on these accounts.

Not reasonable, thinks Johanna Hållén, Secretary-General of the Swedish Consumers' Association.

The banks have been super quick to raise mortgage rates. But woefully slow to raise rates on savings and salary accounts. And now that it's time to lower rates, they're super quick to lower them on savings and salary accounts, she says.

Lowered simultaneously

In recent weeks, the order has been restored, and three out of four major banks now offer no interest at all, while Nordea offers a barely measurable 0.10 percent. As if by coincidence, Handelsbanken and Swedbank lowered their rates to zero on the same day, September 3.

The question of the banks' slowness in raising, but speed in lowering savings rates was raised at a press conference with the Swedish Central Bank last week in connection with the announcement of the lowered repo rate.

Riksbank Governor Erik Thedéen notes with some irritation that the banks are acting exactly like that. But he downplays the idea that it's about poor competition. There are other accounts to move your savings to, either at your existing bank or at another savings institution. The banks are good at increasing their profit margins by taking advantage of the fact that too many people are unwilling to act in their own best interest, according to Thedéen.

"Compensate consumers"

Even on simple savings accounts, the rates have been lowered and are now around 1.50 percent or slightly higher for larger deposits, down from around 2.0 percent six months ago.

We have previously urged consumers to both switch banks and switch accounts. But it's quite clear that people think it's too difficult and cumbersome to get an overview. So we think that the banks now need to compensate consumers who have contributed to the banks' excess profits, says Johanna Hållén.

Niche banks are generally better, they offer higher savings rates, and for example, Skandiabanken offers 0.25 percent on salary accounts.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Tesla Stock Surges 3.6 Percent Boosting Wall Street Indexes

Tesla Stock Surges 3.6 Percent Boosting Wall Street Indexes

Trump Proposes Ending Quarterly Reports for Wall Street Companies

Trump Proposes Ending Quarterly Reports for Wall Street Companies

EU Regulators Seek Stricter Crypto Supervision by ESMA

EU Regulators Seek Stricter Crypto Supervision by ESMA

Elon Musk Buys $1 Billion in Tesla Shares, Boosting Stock by 7%

Elon Musk Buys $1 Billion in Tesla Shares, Boosting Stock by 7%

China Investigates Nvidia for Competition Law Violations

China Investigates Nvidia for Competition Law Violations

USA and China Agree on Tiktok Deal Framework

USA and China Agree on Tiktok Deal Framework

Black Soldier Fly Oil and Protein Developed for Animal Feed

Black Soldier Fly Oil and Protein Developed for Animal Feed

Basmati Rice Dispute Stalls EU-India Trade Agreement

Basmati Rice Dispute Stalls EU-India Trade Agreement

Gaming Companies Lead Gains in Slightly Rising Stockholm Stock Market

Gaming Companies Lead Gains in Slightly Rising Stockholm Stock Market

Sweden Construction Costs Rise 0.4% in August Amid Higher Electricity Prices

Sweden Construction Costs Rise 0.4% in August Amid Higher Electricity Prices

Swedes Report Decreased Satisfaction with Banks This Year

Swedes Report Decreased Satisfaction with Banks This Year

Fashion Trade Sales Rise for Third Consecutive Month

Fashion Trade Sales Rise for Third Consecutive Month

Powell's Rate Signal Influences Swedish Households Too

Powell's Rate Signal Influences Swedish Households Too

Asian Markets Rise Despite Weak China Data

Asian Markets Rise Despite Weak China Data

ANZ Bank Faces Record Fines for Bond Deal Misconduct

ANZ Bank Faces Record Fines for Bond Deal Misconduct

Trump Welcomes Foreign Investment and Workforce in the USA

Trump Welcomes Foreign Investment and Workforce in the USA

Government Boosts Support for Sweden's Regional Airports

Government Boosts Support for Sweden's Regional Airports

Klarna CEO: Embracing "Swedishness" as a Key Asset

Klarna CEO: Embracing "Swedishness" as a Key Asset

Handelsbanken Swish Payment Disruption Resolved

Handelsbanken Swish Payment Disruption Resolved

Government Proposes Increased Export Credit Guarantees for Swedish Companies

Government Proposes Increased Export Credit Guarantees for Swedish Companies