ECB Cuts Deposit Rate to 2.5%, Pressuring Neobank Savings Rates Across Europe
The European Central Bank cut its deposit facility rate by 25 basis points to 2.50% on 6 March 2025, marking its sixth consecutive reduction since the ECB began cutting in June 2024. The rate had peaked at 4.00% in September 2023 following the fastest hiking cycle in the ECB’s history.
The Rate Cutting Cycle in Numbers
| Date | ECB Deposit Rate | Change |
|---|---|---|
| September 2023 | 4.00% | Peak |
| June 2024 | 3.75% | -25bp |
| September 2024 | 3.50% | -25bp |
| October 2024 | 3.25% | -25bp |
| December 2024 | 3.00% | -25bp |
| January 2025 | 2.75% | -25bp |
| March 2025 | 2.50% | -25bp |
Impact on Neobank Savings Rates
The high-rate era of 2022–2024 was a gift to EU neobanks. Trade Republic, Revolut, Wise, and bunq all marketed high-yield savings products that attracted billions in deposits from customers fleeing zero-interest traditional banks.
As the ECB cut rates, neobank savings rates compressed in parallel:
- Trade Republic reduced its cash interest from a peak of ~4% to 2.0% p.a. (ECB-linked) by early 2026
- Revolut and bunq savings rates similarly declined with each ECB action
- Wise Assets feature rates fell proportionally for EUR, GBP, and USD balances
What It Means for Savers
EU residents who chose neobanks purely for savings yields in 2023–2024 are now in a lower-rate environment. The 2–2.5% rates offered by fully licensed neobanks in early 2026 remain above the 0–0.5% offered by many high-street banks, but the gap has narrowed significantly.
For a comparison of current savings rates across EU neobanks, see our Best Savings Account Neobank Europe guide.