hope for savers
Negative interest on deposits could be eliminated
In view of the expected turnaround in interest rates in Europe, bank customers can hope for fee reductions. Photo: Daniel Karmann/dpa
© dpa-infocom GmbH
If you park a lot of money at your bank, you often have to pay for it these days. Such fees, perceived as “penalty interest”, could soon be a thing of the past. Assuming the turnaround in interest rates comes.
In view of the expected turnaround in interest rates in Europe, bank customers can hope for fee reductions.
“As soon as the European Central Bank says goodbye to its negative interest rate policy, we will no longer charge custody fees for private customers,” announced the CEO of ING Germany, Nick Jue, in the “Handelsblatt” (Friday). “That’s a promise.”
On Thursday, the Chief Financial Officer of Commerzbank, Bettina Orlopp, promised changes: “If there are now interest rate increases in the euro area, we will gradually adjust the credit fee.” But first we have to wait and see which course the European Central Bank (ECB) will take.
Since June 2014, commercial banks in the euro area have had to pay interest when they park funds at the ECB. This deposit rate – known as the deposit facility in technical jargon – is currently minus 0.5 percent. A number of financial institutions pass the costs on to their customers.
In view of persistently high inflation, many economists are now expecting a turnaround in interest rates in the euro area in the current year. Jue assumes that the ECB will tighten its monetary policy in such a way that negative interest rates for banks in the first quarter of 2023 could be a thing of the past. “That would be the time when we would cancel the custody fees for our customers,” said the ING Germany boss. The direct bank currently requires a so-called custody fee from its customers for balances of 50,000 or more per account.
“Custody fees” could be eliminated
The association of cooperatives, which represents Volksbanks and Raiffeisenbanks in all federal states with the exception of Bavaria and Baden-Württemberg, also does not expect the institutes to maintain custody fees in the long term. “No bank has a vested interest in these custody fees,” said the association’s deputy chairman, Siegfried Mehring, on Friday in Neu-Isenburg. He expects that to be turned back when the interest rate landscape has changed. “In principle, I would expect that,” said Mehring. “But at the moment we are still speculating about the turnaround in interest rates, we still have the negative interest rate environment.”
According to data from the comparison portal Verivox, 436 banks and savings banks in Germany require private customers to pay a “custody fee” for call money, giro or clearing accounts. The consumer portal Biallo even comes up with 561 institutes that charge private customers negative interest (status of both surveys: February 17, 2022).