On the occasion of World Savings Day, the opposition is calling for legal intervention for a minimum interest rate. A comparison platform for savings interest rates will be launched this year, which will stimulate competition.
It’s World Savings Day and no one is going. Over the past ten years, interest rates have been so low that saving has not been worth it. In the meantime, not only inflation, but also interest rates have risen. However, interest rates on loans have risen considerably more than those on savings. On the occasion of World Savings Day on Tuesday, there is renewed criticism from politicians. “Families used to look forward to World Savings Day. Children took their piggy banks to the bank and received gifts and good interest on their savings accounts.”
Measly interest rates for savings accounts that are payable immediately
Nowadays fewer and fewer people can put anything aside. “If that is the case, there is hardly any interest from the bank,” criticizes SPÖ club boss Philip Kucher and calls for minimum interest rates for savings deposits. According to the Chamber of Labor’s savings interest monitor, interest rates of up to four percent currently apply for online savings and tied savings deposits.
The savings interest (0.5 percent) for daily savings accounts, on the other hand, is still meager. The banks argue that everyday savings accounts are more expensive and that they can counter this with secured funds. In addition, a comparison platform for savings interest rates is expected to be launched by the end of the year. With this transparency platform of the National Bank, the Ministry of Finance, including the WKÖ banking department, the conditions of the Austrian financial institutions for savings offers should be bundled and presented in an understandable way.
Imbalance between interest rates on loans and savings
The SPÖ is not alone in its demand; the FPÖ demands ceilings on interest rates on loans and the immediate passing on of interest rate increases on savings accounts. Support also comes from the eco-social Momentum Institute. This compared the lending interest and the savings interest: according to this, the interest on overdrafts increased from 3.5 percent in August 2022 to 6.4 percent.
The interest rate for daily savings rose from 0.06 percent to 0.73 percent and for tied deposits from 0.3 to 1.7 percent. Momentum calls for a guaranteed minimum interest rate based on the French model.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
