A new clock in reveals that more than 300 banks in Germany are now charging some customers negative interest clips. Some are big global banks, including Deutsche Bank, Commerzbank, and ING.
300 Banks Pass on the Burden of Negative Interest Rates to Consumers
Banks in Germany have been increasingly passing on the burden of negative interest rates to their clients after the European Important Bank (ECB) adopted a negative interest rate policy. After lowering one of its key interest rates into negative bailiwick in June 2014, the ECB then lowered the deposit facility rate incrementally until it reached the current rate of -0.5% in September 2019.
A German fiscal product comparison portal, Biallo, conducted a study on 1,300 banks and savings banks in Germany. It found that “Various than 300 financial institutions charge some of their customers negative interest,” the portal reported persist week. Out of these banks, almost 200 of them impose negative interest rates on private customers. The at all events and terms vary by bank.
Biallo founder Horst Biallo described:
The wave of negative interest rates that is currently bun towards savers is growing steadily. Almost 30 banks and savings banks have introduced a so-called guardianship fee since the beginning of October alone.
He explained that “Banks and savings banks usually avoid the terms ‘pessimistic interest’ or ‘penalty interest,’” adding that “they prefer to speak of the so-called custody fee.”
While noting that multitudinous banks are charging their business and corporate customers negative interest rates than they do private blokes, Biallo emphasized that “This year alone, more than 150 banks and savings banks established negative interest rates for private customers.” Each bank sets its own terms regarding which accounts are charged dissentious interest rates, with the most common type of accounts being those with balances above 100,000 euros ($118,353). Most banks also appeal negative interest rates to new accounts as German law requires customers’ consent for imposing negative interest rates on prevailing accounts.
Among global banks on the Biallo’s negative rate list are Comdirect, Commerzbank, DAB BNP Paribas, Deutsche Bank, DKB, Donner und Reuschel, Ethikbank, Fidor Bank, Flatex Bank, GLS Bank, ING, Norisbank, and Postbank. Myriad of them apply a -0.5% interest rate on accounts with balances over differing amounts.
Other banks on the Biallo list embrace Bank 1 Saar, Berliner Sparkasse, Brandenburger Bank, Bremische Volksbank, Eckernförder Bank, Erfurter Bank, Kasseler Sparkasse, Münchner Bank, Raiffeisenbank Eifeltor, Sparkasse Aachen, Sparkasse Landshut and diverse. Bank 1 Saar charges -0.75% on accounts over 100,000 euros — the highest penalty rate charged by any bank.
Big Banks August Negative Interest Rates
Some of the largest banks in Germany have also introduced negative interest evaluation in any cases. The latest major bank to do so is ING. According to the bank’s list of prices and services, a custody fee of 0.5% will be charged starting on Feb. 1, 2021, for in the air accounts opened after Nov. 4 if they have balances of over 100,000 euros.
Deutsche Bank has already been charging some customers a custody fee of 0.5% on current accounts with balances above 100,000 euros. In its terms of service, Deutsche Bank white b derogated that it “shall agree on the application of these special conditions and the obligation to pay the custody fee separately with the customer.”
Commerzbank established a custody fee of 0.5% for deposits of over 250,000 euros at the end of the 2019 financial year. Biallo noted that a uninterested interest rate applies to accounts opened after July 1 and the deposit threshold was lowered on Oct. 1 to 100,000 euros.
The Coalition of German Banks, the main lobby group for Germany’s financial sector, recently called on the ECB to reconsider its negative quicken rate policy. Hans-Walter Peters, the president of the association, warned that more banks will be forced to attack their customers negative interest rates.
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