Explanation
The terms from the comparison in plain language. How exactly we calculate and check is in the methodology.
What is the effective annual rate?
The interest you really earn per year on your amount, after fees and including compound interest. A bank advertises one percentage; the effective annual rate works through tiers, a promotional rate that drops after a few months, fees and the payout frequency. That is why the comparison is sorted by effective annual rate and not by the advertised percentage.
Read on: Promotional rates: when does a temporarily high savings rate pay off? · Interest calculator with compound interest
What is a promotional rate?
A temporarily higher rate, usually for a few months and often only for new customers or new money. After that the base rate applies. In the calculation the promotional rate only counts for the promotion period and up to the promotion cap; the rest of the period earns the base rate. So 3% for 3 months does not automatically beat 2.7% lasting.
Read on: Promotional rates: when does a temporarily high savings rate pay off?
What is the deposit guarantee (DGS)?
Every country in the European Economic Area has a statutory deposit guarantee scheme that protects savings up to €100,000 per person per banking licence if the bank fails. The scheme of the country where the bank holds its licence is what counts, also when you save via Raisin. Two brands on one licence share one limit. The comparison shows for each offer whether your amount is fully covered.
Read on: Is saving at a foreign bank safe? How the deposit guarantee works in Europe
What is withholding tax?
Tax that some countries withhold on interest before it is paid to you. The Netherlands has no withholding tax on savings interest; Spain, Portugal and Latvia, for example, do. A Dutch saver can reduce it with a form or, as with Spain, avoid it altogether, but that is work. Each offer states whether there is withholding tax and what remains for a Dutch resident.
Read on: Withholding tax on foreign savings interest: what do you really keep?
Instant access, notice period or deposit?
Instant access: you can reach your money any day, the rate is variable. Notice period: you must announce a withdrawal in advance (for example 31 or 90 days) and usually get slightly more interest for that. Deposit: you lock an amount for a fixed term at a fixed rate; early withdrawal is usually not possible or only with a loss of interest.
Read on: Deposit or savings account: which earns more right now?
What do compound interest and interest payout mean?
If the interest is credited to your balance, you also earn interest on that interest the next year: compound interest. If the interest is paid out to your current account, you have the money in hand. The comparable annual rate assumes you reinvest paid-out interest at the same rate, so both methods stand fairly side by side.
How does saving via Raisin work?
Raisin is a marketplace where you can save at dozens of European banks with one account. Your money is held at the chosen bank, under the deposit guarantee of that bank's country. Raisin handles the opening and the transfers; the rate is the bank's. Offers via Raisin appear in the comparison with the label "via Raisin".
Read on: Is saving at a foreign bank safe? How the deposit guarantee works in Europe
What about tax in the Netherlands (box 3)?
The Dutch tax on assets (box 3) depends on your total assets and personal situation, not on the interest on one account. That is why it is not part of the calculation. Rates on this site are gross.