ING Belgium is offering customers an interest rate of 4% on six-month term savings accounts, l'Echo reports.
The offer, which will remain available to the bank's customers until the end of November, requires a minimum deposit of €1,000. Customers will also not be charged any fees for opening, managing, or closing the account.
The offer also represents the first time that a Belgian bank has provided a savings rate equal to the European Central Bank's (ECB) 4% benchmark deposit facility rate.
The announcement follows ING's announcement last week that it will increase the total rate on its (non-fixed-term) Tempo savings accounts to 3%.
'Abundant liquidity'
ING is not the only major Belgium-based bank which has hiked savings rates over the past few days. Belfius recently announced that its Fidelity savings account rate will increase to 2%, up from 1.25%. Its traditional savings account rate will also rise from 1% to 1.10%.
Banks have come under increasing pressure to increase savings rates in recent months, as repeated interest rate hikes by the European Central Bank (ECB) have largely failed to be passed onto savers.
According to leading consumer rights group Test Achats, the difference between the ECB rate and the interest rates offered to savers is the primary cause of Belgian banks' soaring profit margins.
Over the first six months of this year, Belgium's six largest banks (BNP Paribas Fortis, KBC, ING Belgium, Belfius, Argenta and Crelan) recorded total net earnings of €3.1 billion – roughly a quarter more than in the same period in 2022.
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The IESEG School of Management also recently reported that Belgian banks' "abundant liquidity" means that they still have significant room to raise rates.
"All banks still have a margin to increase the rate on the total amount of regulated savings deposits without making losses," the IESEG noted. It stressed that "large, highly diversified banks" have the greatest room for manoeuvre, including BNP Paribas Fortis, Belfius, and ING.
The IESEG also suggested that commonality of interest, rather than lack of competition, is the key factor underlying banks' refusal to hike rates.
"There are still enough different banks for there to be competition," it noted. "The explanation is that they have little interest in competing to attract customer deposits as long as the abundance of liquidity caused by the exceptionally accommodating monetary policy of the ECB since the middle of last year persists."
