An interest rate is the percentage that determines how much your money grows when you save, or how much you pay when you borrow. A higher rate on savings means more earnings; a higher rate on a loan means higher repayments.

Rates move with the economy and central bank decisions. Understanding the difference between the rate you earn and the rate you pay helps you make smarter choices with your cash.

How interest rates work

Banks and lenders express rates annually (APR or APY). On savings, interest is usually calculated on your average balance and paid monthly or weekly. On loans, interest is added to what you still owe, which is why paying down principal faster saves money over time.

In the eurozone, the ECB sets key policy rates that influence what banks charge and offer. When policy rates rise, savings rates often follow; when they fall, borrowing may get cheaper but savings yields can drop.

Fixed vs variable rates

• Variable rate: Can change during the life of the product. Common on everyday Savings Accounts.

• Fixed rate: Locked for a set period. A Term Deposit guarantees your return for the full term.

Variable rates offer flexibility; fixed rates offer certainty when you do not want surprises.

Interest rates and bunq

Earn interest on bunq Savings Accounts, paid weekly so your balance keeps working. For a locked-in return, open a Term Deposit. Use Budgeting to free up more money to save, and read how compound interest accelerates growth over time.

Common questions

Why did my savings rate change?

Banks adjust customer rates when market and central bank rates shift. Check your app for the current rate on your account.

Is the advertised rate what I actually get?

Confirm whether the rate is gross or net of tax, and whether bonuses or conditions apply. bunq shows your rate clearly in the app.