Locking up savings gives the highest interest

Author: |
securing savings

Do you want the highest possible interest on your savings?

Then pinning it somewhere is a smart option.

But be aware that you will not be able to just access it when you need it anyway.

We explain how this works and where you can get high interest.

In this article:

Finding highest interest

We'll start right away with the most important thing: which bank gives the maximum interest on your savings? We keep track of this live for you in the overview below. NB: these are the positions of normal savings accounts, via the button “all savings interest” you can also look specifically for deposits , because that's what you call accounts to which you deposit savings.

This overview is real time so it always shows the best deal available at the moment. Click for more information to the providers or make a more extensive comparison via the bottom button.

It is always smart to request multiple quotations, they are non-binding, but there can be many differences in the options and conditions. And not only the interest, but also regarding possible terms, withdrawal penalties, minimum investment, etc. Just read carefully and compare.

The highest interest rates are currently mainly found in the Baltic states and Spain. Don't let that deter you, they are part of the EU and have a guarantee scheme from the government. Your money is therefore protected. More on that later.

Fixed or freely absorbable

Back to the main question: does locking money give you the highest interest rates? Yes that is actually always the case. You donate your money to the relevant bank for a period of 1 - 10 years and in exchange for the certainty that the bank has that they can make other investments with that money, they give you a higher interest.

This is in contrast to a normal savings account where your assets can always be withdrawn freely. It is therefore important to consider how long you can really miss your money. Going only for the higher interest is nice, but if you end up without income in a while and can no longer pay the mortgage, then you have lost your house nicely and it will only cost you a lot of money.

Incidentally, there are still intermediate forms between deposits and the basic savings account. You can also save with all kinds of flexible conditions, which also give you a somewhat higher interest. For example, you can get an extra interest if you leave your money for a certain period, but it is withdrawable at all times (but then you just don't get that bonus).

Then there are also bills with other types of rules, such as monthly contributions or withdrawal regulations or costs. Bills also regularly give a higher interest, but only up to a certain savings balance.

Deposit terms

The period for which the money can be deposited differs per bank. Often it starts at a minimum of 1 year and banks will go as far as 3, 5, 10 years or sometimes even longer than that. As a rule of thumb, the longer the agreed time, the higher return you will get.

You can also easily divide your money over several deposits of different periods, so you still have a certain security on a buffer should something happen. Of course, nobody knows what the situation will be in 5 years, but you can say something about it in a year. For example, close a year for half your money and longer for the rest. In that case, keep the minimum investment in mind.

Withdrawal Fees

An important point to consider are the rules and costs regarding the interim withdrawal of your money, or the termination of the deposit. There are often rules for this that protect you when you actually run out of money.

Like when you lose your job or you are in danger of having to sell your house. That is often covered, but not always. It would be a bit bitter that you are declared bankrupt in the Netherlands while in Latvia you still have a ton in a savings account that you simply cannot access.

As mentioned, many banks cooperate if you really have to, but there are often fines that you have to pay or your return is adjusted / reduced retroactively. But in the worst case, you obviously don't care about that because then you just have to keep your head above water.

Valid reasons for dismantling the term of deposit are as a rule:

  • Incapacity for work
  • Passing away
  • Purchase of a house
  • Debt restructuring
  • Wedding
  • Making your home more sustainable
  • Unemployment

But even then there are still banks that really do not allow you to appropriate the money before the expiration date!

Deposit guarantee scheme

Your savings can be substantial amounts, just look at the buffer that you should maintain according to Nibud. And be aware that you should certainly not deposit them in a deposit because you should always be able to plunder them in an emergency.

A broken car, washing machine, accident, damage to your house that turns out not to be insured, etc. Financial setbacks that you should be able to absorb, because having to borrow money for it always costs you more interest than you can save.

Anyway, we can all still remember the ICE-save drama in Iceland where many Dutch people have long thought they have lost their hard-earned savings forever.

Ever since, governments in the EU have made agreements about national guarantee schemes. The bottom line is that you are always protected up to 100,000 US dollars per bank in the EU. So the bank goes under, you still get your money back. Please note, this is per bank not per account or per brand . Banks sometimes work with multiple brands / names, but that is not the case.

If you are so wealthy that you want to save more than a ton, make sure to divide this over several banks to make sure you are safe should an economic crisis or bank run break out again.

Handy is Raisin's service, where you can merge and manage all deposits in Europe from one portal, while spreading your risk over several banks. They also offer the highest interest rates at the moment. View all offers