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Information about interest on savings

When and how often do you receive interest?

You are saving or would like to save with ABN AMRO and would like to know which kind of interest you earn. The interest that the bank pays out is expressed as a percentage. For a term deposit, the rate is the same throughout the term; this is called a fixed interest rate. For savings accounts, the rate is variable, meaning that it can change. The amount of interest you receive and how often depends on the type of savings account you have.

Once a year or once a quarter?

This is how you know when you receive interest:

  • For most of the savings accounts, interest is paid out once a quarter or once a year. It depends on the type of savings account you have. The features page for your savings account on this website explains which kind of interest you receive.

  • For a Spaardeposito (Savings Deposit), we pay out interest once a year. For a minimum deposit of € 5,000,-, you can opt for monthly interest payments.

  • For an AEX Spaarrekening (AEX Savings Account), interest is paid out in periods of six months providing the AEX-Index® rises. 

Interest paid out once a year

For savings accounts that pay out interest once a year, we state the nominal interest rate. This is the interest that you earn for the entire period, in this case a whole year. So, if you had €1,000 in your savings account for a whole year and the (nominal) interest rate is 2%, you would earn €20 in interest.

This is how it works

You build up interest every day on the amount of money you have in your savings account. In one year (365 days), you build up 1/365 of the savings rate every day. Your savings earn interest over the actual number of days that the money is in your savings account. This applies to the base rate and to any bonus interest you receive.

Sample calculation

For example, on 31 December 2012, the balance in your savings account was €5,000. You received €2,000 in holiday pay that you put in your savings account on 25 May 2013. On 15 August 2013, you went on holiday and withdrew €1,000 from the account. The savings rate in this sample calculation is 1.50% and does not change during the year. The interest is calculated as follows:

Period Your interest
31 December 2012 to 24 May 2013 1.50% of €5,000 x 145/365 days = €29.79
25 May 2013 to 14 August 2013 1.50% of €7,000 x 82/365 days = €23.59
15 August 2013 to 30 December 2013 1.50% of €6,000 x 138/365 days = €34.03
Total savings interest for 2013 € 87.41

Interest paid out once a quarter

For savings accounts that pay out interest once a quarter, you receive interest four times a year. Your savings earn interest over the number of days in a quarter that the money is in your savings account. This always applies to the base rate and to the bonus interest if you receive bonus interest in that quarter. If you leave the interest in your account, you will also earn interest on this amount in the next quarter. You earn interest on the interest.

This is how it works

If you leave your money and the interest in your account for a whole year, interest is paid out as follows:

  • Interest is credited once a quarter.

  • In the next quarter, you earn interest on your savings and the interest earned in the last quarter.

  • And in the next quarter, you earn interest on the full amount in your account.

  • This is what is referred to as the 'interest on interest' effect.

  • The interest rate that indicates what the interest will be if you leave your savings in your account for a full year is called 'effective interest rate'.

Example

Nominal interest rate Effective interest rate
Nominal interest rate (once a quarter) 1.294% Effective interest rate (once a year) 1.30%
Nominal base rate (once a quarter) 1.095% Effective base rate (once a year) 1.10%
Nominal bonus rate (once a quarter) 0.20% Effective bonus rate (once a year) 0.20%

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