Morgan Stanley targets Dutch savings with high rates

Morgan Stanley has begun offering savings accounts to residents of the Netherlands, joining a growing line-up of foreign banks competing for Dutch deposits.

The American investment bank is offering the accounts through the European savings platform Raisin, where Dutch savers can open a fixed-term deposit account with Morgan Stanley for the first time this week.

The money has to stay locked in for at least three months, with interest rates ranging from 2.5 to 2.95 percent.

That is roughly a full percentage point above what the large Dutch banks typically pay, and only slightly below three Baltic providers already on the same platform.

Raisin’s Eelco Habets described the arrival of a globally known institution like Morgan Stanley as a milestone for Dutch savers looking beyond their own banks.

Morgan Stanley is offering the accounts through its German subsidiary, so if the bank were ever to fail, deposits up to 100,000 euros would be protected under Germany’s deposit guarantee scheme rather than a Dutch one.

Reclaiming money held abroad can involve more hassle than a domestic account, which is part of why Dutch savers have traditionally accepted lower rates at home.

Fixed-term deposit accounts have grown sharply in popularity among Dutch savers in recent years. Figures from the Dutch central bank, cited by Raisin, show this type of saving has grown around 50 percent over the past five years.

The trade-off is that money cannot be withdrawn during the agreed period without paying a penalty.

Peter Krowinkel, who heads Morgan Stanley’s operations in the Netherlands, noted that the bank has already been active in the country for three decades in other lines of business, and framed the launch as an extension of that long-standing presence into retail savings.

Morgan Stanley employs about 80,000 people and ranks among the ten largest banks in the United States, with roughly 1.7 trillion dollars under management.

The bank nearly collapsed during the 2008 financial crisis before being rescued with support from the US Federal Reserve and a 9 billion dollar investment from Japan’s Mitsubishi UFJ Financial Group, which took a 21 percent stake now worth close to 70 billion dollars, one of the most successful bank investments to come out of that crisis.

Source: De Telegraaf