Negative interest

Changes in conditions and interest rate policy

The Commercial Payment Services Conditions and the product conditions for our business savings accounts are due to change effective from 1 April 2020. Under the old conditions we could already charge negative interest per individual account. The new conditions also make it possible to charge negative interest at client level. This means that you will pay negative interest when the balance on all business payment and savings accounts held in your name exceeds €2,500,000.

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Current interest rates and maximum savings balances

The current conditions (version July 2017) specified the maximum savings amount and the maximum balance per savings account. From 1 April 2020 you can see the applicable maximum amounts for each of your savings accounts on the page with current interest rates. These maximum amounts are unchanged.

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Questions about the letter?

We have compiled a list of FAQs with answers. If your question is not listed here, please get in touch with your contact person within the bank or call 088 - 226 26 26 (standard charges apply). From outside the Netherlands: +31 (10) 241 17 20 .

FAQs about negative interest

On what balance do I pay negative interest?

This depends on which balance tier you fall in. In the current situation, negative interest is charged on the total balance held in the name of a single legal entity or natural person. The balances in all business payment and savings accounts within your company are added together. You pay negative interest on the balance in balance tiers upwards from € 2,500,000.

If you and your company are separately registered with us, we will treat you and your company as separate clients and your balance tiers will be calculated separately.

What are balance tiers?

The bank can determine what interest rate is applicable above a certain balance. This results in balance tiers. The interest rates and the balance tiers are not fixed. The bank may change these at any time. For the current interest rates and balance tiers, go to abnamro.nl/creditgeld. 

A balance tier can also apply to all balances in your payment and savings accounts as well as all payment and/or savings accounts held in your name together with co-account holder(s). We call this the total balance. 

If a balance is held with co-account holder(s), each co-account holder is assigned an equal portion of that balance for the calculation of his or her total balance. "You" and "co-account holder" refer to a natural person or a legal entity.

Balance tier (total balance of payment and savings accounts)* Interest*
€ 0,- t/m € 100,000 0%
€ 100,000 t/m € 2,500,000 0%
From € 2,500,000 - 0,50%

*Balance tiers and interest rate are not fixed and may change.

Which accounts are excluded from negative interest?

  • Bank Guarantee Cover Account
    The Bank Guarantee Cover Account is a savings account exclusively for moneys that serve as security for a bank guarantee. The balance in this account is blocked until the bank guarantee expires.

  • G-Account
    The G-Account is only allowed to be used to make tax and social security payments to the tax authorities or sub-contractors.

Example of balance tiers and total balance

Negative interest calculation for balances above €2,500,000

Client ABC B.V. Balance Amount included in negative interest calculation
Business Account € 250.000 € 250.000
Overdraft Facility € -250.000 € -250.000
Business Savings Account 1 € 2.000.000 € 2.000.000
Business Savings Account 2 € 2.000.000 € 2.000.000
€ 4.000.000

The balance on which negative interest is calculated is
€ 4.000.000 - € 2.500.000 = € 1.500.000

Tabel berekening negatieve rente boven € 2.500.000

Client ABC B.V. Balance Amount included in negative interest calculation
Business Account € 600.000 € 600.000
Guarantee account* € -1.000.000 0
Business Savings Account € 2.000.000 € 2.000.000
G-account* € 500.000 0
Bank Guarantee Cover Account* € 1.000.000 0
€ 2.600.000

The balance on which negative interest is calculated is
€ 2.600.000 - € 2.500.000 = € 100.000

* Excluded from negative interest

Why must I pay negative interest?

The European Central Bank (ECB) lends money to banks at low rates. This enables banks to lend to businesses at cheaper rates. Normally, banks also receive interest on money that they do not lend and are required to maintain in a deposit with the ECB. This is the deposit rate.

Since June 2014 the deposit rate has fallen so far that it has now sunk below 0%. In fact, it is currently as low as -0.50%. This means that banks currently do not receive interest, but are actually required to pay interest to the ECB. These costs, in turn, are passed on to clients in the form of negative interest.

ABN AMRO already started some time ago to charge negative interest to ultra-high net worth clients and large corporate clients.

A more detailed explanation of the low interest rates can be found u here (in Dutch).

Why can the bank charge negative interest?

In the case of specific circumstances, such as developments in the money and capital markets, the bank can charge negative interest.

The interest rate for clients turns negative if the ECB rate remains below 0% for a prolonged period of time. ABN AMRO wants to spare clients with a limited total balance in their accounts insofar as possible. This is the reason for introducing balance tiers per client.

When must I start paying negative interest?

The bank may determine what interest rate is applicable above a certain balance. This results in balance tiers. From 1 April 2020 we will decide on a daily basis which balance tier applies to your company. We do this by adding together the balances of your company’s payment and/or savings account(s). 

New conditions will apply from 1 April 2020. Under the old conditions we could already charge negative interest per individual account. The new conditions will change this system. They entail that you will pay negative interest if and when the balance in all commercial payment and savings accounts held in your company’s name exceeds EUR 2,500,000.

Does a self-employed person's personal wealth also count towards the total threshold amount of EUR 2,500,000?

If you and your company are separately registered with us, we treat you and your company as separate clients and the balance tiers are calculated separately.
So you have a threshold as a commercial client and a threshold as a retail client.

Why is ABN AMRO introducing negative interest rates?

Interest rates are driven by the interest rate policy pursued by the European Central Bank (ECB). The ECB has consistently reduced the European deposit facility rate, which means that Dutch banks pay high costs for placing savings balances with the ECB. The bank is obliged to place part of its balances with the ECB. 

We have charged large parties negative interest under tailor-made arrangements for some years now. From 1 April, interest will also be charged to clients with high balances (EUR 2,500,000 and higher) under our standard conditions. The reason is that money in the capital market is cheaper than savings, partly because of the low interest rate environment. Banks incur costs to place surplus savings. The ECB, for instance, charges banks 0.5% interest for deposits.

Why is the ECB applying a negative deposit facility rate?

The ECB is applying a negative savings rate to boost the economy. According to the Central Bank, low interest rates encourage investment, which means that more money is lent and less is saved.

Can interest rates go any lower?

The future is hard to predict, so we will need to continuously reassess the situation. We make no statements about possible rate cuts (nor are we allowed to do this).

Will the EUR 2,500,000 threshold be reduced further?

The future is hard to predict, so we will need to continuously reassess the situation. We make no statements about possible reductions (nor are we allowed to do this).

Is my current account overdraft deducted from the total balance?

Yes, any current account debit balances that exist within the same company are included in the total calculation. In such situations, for reasons of working capital management we advise you to keep your credit funds in a current account instead of in a separate savings account, where possible.

If I have to pay negative interest, when will this interest be debited to my account?

You pay negative interest for a ‘calendar quarter’, i.e.: 

  • quarter 1: January, February, March 
  • quarter 2: April, May, June 
  • And so on. 

Interest is always charged in the month following a calendar quarter. The negative interest rate takes effect on 1 April 2020. Negative interest for the 2nd quarter of 2020 will be charged in July 2020 for the first time. 

The negative interest will be charged to your company’s main account.

How can I avoid negative interest?

By ensuring that the total credit balance in your company’s accounts remains below EUR 2,500,000. Clearly, as indicated by the ECB, you may also consider making any desired investments or balancing your longer-term working capital and your outstanding debts as efficiently.

FAQs about negative interest

This depends on which balance tier you fall in. In the current situation, negative interest is charged on the total balance held in the name of a single legal entity or natural person. The balances in all business payment and savings accounts within your company are added together. You pay negative interest on the balance in balance tiers upwards from € 2,500,000.

If you and your company are separately registered with us, we will treat you and your company as separate clients and your balance tiers will be calculated separately.

The bank can determine what interest rate is applicable above a certain balance. This results in balance tiers. The interest rates and the balance tiers are not fixed. The bank may change these at any time. For the current interest rates and balance tiers, go to abnamro.nl/creditgeld. 

A balance tier can also apply to all balances in your payment and savings accounts as well as all payment and/or savings accounts held in your name together with co-account holder(s). We call this the total balance. 

If a balance is held with co-account holder(s), each co-account holder is assigned an equal portion of that balance for the calculation of his or her total balance. "You" and "co-account holder" refer to a natural person or a legal entity.

Balance tier (total balance of payment and savings accounts)* Interest*
€ 0,- t/m € 100,000 0%
€ 100,000 t/m € 2,500,000 0%
From € 2,500,000 - 0,50%

*Balance tiers and interest rate are not fixed and may change.

  • Bank Guarantee Cover Account
    The Bank Guarantee Cover Account is a savings account exclusively for moneys that serve as security for a bank guarantee. The balance in this account is blocked until the bank guarantee expires.

  • G-Account
    The G-Account is only allowed to be used to make tax and social security payments to the tax authorities or sub-contractors.

Negative interest calculation for balances above €2,500,000

Client ABC B.V. Balance Amount included in negative interest calculation
Business Account € 250.000 € 250.000
Overdraft Facility € -250.000 € -250.000
Business Savings Account 1 € 2.000.000 € 2.000.000
Business Savings Account 2 € 2.000.000 € 2.000.000
€ 4.000.000

The balance on which negative interest is calculated is
€ 4.000.000 - € 2.500.000 = € 1.500.000

Tabel berekening negatieve rente boven € 2.500.000

Client ABC B.V. Balance Amount included in negative interest calculation
Business Account € 600.000 € 600.000
Guarantee account* € -1.000.000 0
Business Savings Account € 2.000.000 € 2.000.000
G-account* € 500.000 0
Bank Guarantee Cover Account* € 1.000.000 0
€ 2.600.000

The balance on which negative interest is calculated is
€ 2.600.000 - € 2.500.000 = € 100.000

* Excluded from negative interest

The European Central Bank (ECB) lends money to banks at low rates. This enables banks to lend to businesses at cheaper rates. Normally, banks also receive interest on money that they do not lend and are required to maintain in a deposit with the ECB. This is the deposit rate.

Since June 2014 the deposit rate has fallen so far that it has now sunk below 0%. In fact, it is currently as low as -0.50%. This means that banks currently do not receive interest, but are actually required to pay interest to the ECB. These costs, in turn, are passed on to clients in the form of negative interest.

ABN AMRO already started some time ago to charge negative interest to ultra-high net worth clients and large corporate clients.

A more detailed explanation of the low interest rates can be found u here (in Dutch).

In the case of specific circumstances, such as developments in the money and capital markets, the bank can charge negative interest.

The interest rate for clients turns negative if the ECB rate remains below 0% for a prolonged period of time. ABN AMRO wants to spare clients with a limited total balance in their accounts insofar as possible. This is the reason for introducing balance tiers per client.

The bank may determine what interest rate is applicable above a certain balance. This results in balance tiers. From 1 April 2020 we will decide on a daily basis which balance tier applies to your company. We do this by adding together the balances of your company’s payment and/or savings account(s). 

New conditions will apply from 1 April 2020. Under the old conditions we could already charge negative interest per individual account. The new conditions will change this system. They entail that you will pay negative interest if and when the balance in all commercial payment and savings accounts held in your company’s name exceeds EUR 2,500,000.

If you and your company are separately registered with us, we treat you and your company as separate clients and the balance tiers are calculated separately.
So you have a threshold as a commercial client and a threshold as a retail client.

Interest rates are driven by the interest rate policy pursued by the European Central Bank (ECB). The ECB has consistently reduced the European deposit facility rate, which means that Dutch banks pay high costs for placing savings balances with the ECB. The bank is obliged to place part of its balances with the ECB. 

We have charged large parties negative interest under tailor-made arrangements for some years now. From 1 April, interest will also be charged to clients with high balances (EUR 2,500,000 and higher) under our standard conditions. The reason is that money in the capital market is cheaper than savings, partly because of the low interest rate environment. Banks incur costs to place surplus savings. The ECB, for instance, charges banks 0.5% interest for deposits.

The ECB is applying a negative savings rate to boost the economy. According to the Central Bank, low interest rates encourage investment, which means that more money is lent and less is saved.

The future is hard to predict, so we will need to continuously reassess the situation. We make no statements about possible rate cuts (nor are we allowed to do this).

The future is hard to predict, so we will need to continuously reassess the situation. We make no statements about possible reductions (nor are we allowed to do this).

Yes, any current account debit balances that exist within the same company are included in the total calculation. In such situations, for reasons of working capital management we advise you to keep your credit funds in a current account instead of in a separate savings account, where possible.

You pay negative interest for a ‘calendar quarter’, i.e.: 

  • quarter 1: January, February, March 
  • quarter 2: April, May, June 
  • And so on. 

Interest is always charged in the month following a calendar quarter. The negative interest rate takes effect on 1 April 2020. Negative interest for the 2nd quarter of 2020 will be charged in July 2020 for the first time. 

The negative interest will be charged to your company’s main account.

By ensuring that the total credit balance in your company’s accounts remains below EUR 2,500,000. Clearly, as indicated by the ECB, you may also consider making any desired investments or balancing your longer-term working capital and your outstanding debts as efficiently.