The European Central Bank (ECB) is the central bank for the countries that use the euro. It sets the key interest rates that determine how much it costs banks to borrow money and how much they earn on deposits held with the ECB.

Think of the ECB as the guardian of the euro. Its primary job is to keep inflation under control and maintain price stability across the eurozone. When it raises or lowers its rates, those changes ripple through the entire economy, affecting mortgages, savings, loans, and foreign exchange.

Why the ECB rate matters

The ECB rate is one of the most watched figures in European finance, and for good reason: it affects nearly every part of the economy.

When the ECB raises rates, borrowing gets more expensive but savings tend to earn more. Banks pass on a portion of those higher rates to their customers through improved savings interest. When the ECB cuts rates, borrowing becomes cheaper, which encourages spending and investment, but savings rates typically fall as a result.

You don't need to follow financial news to feel these changes. They show up in your monthly mortgage statement, the interest on your savings, and the cost of a personal loan.

How it affects your money at bunq

The ECB rate is one of the key factors that influences the interest you can earn on a Savings Account. Banks use the ECB's deposit facility rate as a reference when setting their own rates.

At bunq, we track ECB decisions so your savings stay aligned with the broader market. Auto Round Up lets you add small amounts to your savings automatically every time you make a purchase, and those amounts earn interest that moves with the economy over time.

If you'd prefer a guaranteed return regardless of what the ECB does next, a Term Deposit lets you lock in a fixed rate for a set period. If you believe rates are about to fall, locking in now means your return stays protected.

The ECB rate and spending abroad

ECB rate decisions also influence the euro's value against other currencies. When rates rise, the euro often strengthens. When they fall, it can weaken, which affects how far your money goes internationally.

With bunq's ZeroFX, your foreign transactions use the real Mastercard exchange rate at the moment of payment, with a small 0.5% adjustment to protect against short-term market swings.* There are no hidden fees and any adjustments are shown clearly before you pay.

*ZeroFX is automatically active for all bunq users. bunq Free users can make payments abroad up to €1,000 per year, while bunq Core, Pro, and Elite users enjoy unlimited foreign payments.