Belgium (The Brussels morning newspaper): More than 500,000 Belgians invested €21.896 billion in a one-year state bond, prompting banks to offer competitive rates.
A year back, more than 500,000 folks signed up for the one-year state bond, bringing in a record €21.896 billion. This cash, along with a net interest of 2.81%, will be available on Wednesday, totaling over €22.5 billion. Since this money is flowing back into the Belgian economy, lots of banks want a piece of it. ING, Belfius, KBC, and others started special offers last week. They introduced term accounts with interest rates as high as 4% for periods ranging from six months to one year.
What moves will BNP Paribas Fortis make?
Among the big banks, BNP Paribas Fortis hasn’t made any public moves yet to attract those receiving their state bond money. However, they might do so next Friday when they reveal their half-year results. On the other hand, Argenta mentioned that they won’t be joining in these one-time promotions. Starting from Thursday, the Federal Government will join in too. They will be issuing two new state bonds: one that matures in one year and another that matures in ten years. Unlike last year when the tax was lowered to 15%, this time the full 30% tax will need to be paid, making the new bonds less appealing than last year’s.
The one-year bond will give a gross yield of 2.75% (1.925% net), as announced by the Debt Agency on Tuesday. The ten-year bond will have a gross yield of 2.8% (1.96% net), which is lower than the rates offered by some big banks. So, if you get your cash back from the one-year state bond on Wednesday, you can either grab a new state bond right then or stash it in a savings or term account, each with its own rules. The money you put in these options is safe, and you get a set amount back on top. Keep in mind that savings rates will drop soon, along with inflation. Right now, inflation is about 3% but it’s predicted to go below 2% by next spring.
