Status: 04/01/2022 10:20 a.m
It’s getting harder and harder for savers in Germany because the number of banks charging negative interest rates is increasing. In addition, more and more financial institutions are reducing their allowances.
At the end of March, 449 of around 1,300 banks evaluated demanded negative interest for sums above a certain level on the call money or current account. This emerges from a study by the comparison portal Verivox. Three months earlier there were 423 and a year ago only 281 banks. At the same time, according to the information, the trend towards lower and lower tax allowances, which are exempt from the negative interest rates, which are often also referred to as custody fees, is continuing.
The consumer portal Biallo.de even identified 572 banks that charge negative interest on private deposits. It also noted the trend towards falling tax allowances.
Legally controversial
“For a long time now, it has not only been particularly wealthy bank customers who have to pay negative interest rates, small and average savers are also increasingly affected,” explained Oliver Maier from Verivox. Some banks collect a custody fee from as little as 5,000 or 10,000 euros on the call money, giro or clearing account. At least 175 credit institutions limited the total credit allowance to EUR 50,000 or less. A year ago there were only 90 and at the turn of the year 155 financial institutions.
Consumer advocates generally consider negative interest rates on private credit balances in checking and money market accounts to be inadmissible. The Federation of German Consumer Organizations (vzbv) had therefore filed lawsuits against various credit institutions and sees itself confirmed by the first judgments.
Custody fees primarily affect new customers. If a financial institution wants to demand negative interest from existing customers, this must be agreed individually with those affected. Some banks have meanwhile started to terminate accounts if the customers do not agree to the custody fee.
Banks are demanding different monetary policies
The banking industry is not happy with the negative interest rates either. Most recently, some had announced an end to negative interest rates as soon as the penalty interest on bank deposits at the European Central Bank (ECB) was abolished.
Only recently did the industry demand that the ECB abolish negative interest rates this year. Negative interest rates are a crisis tool to combat the risk of deflation, said Christian Ossig, general manager of the Association of German Banks (BdB). “In today’s environment, they are a completely wrong tool, and they send the completely wrong signal from monetary policy, too,” he noted. “The negative interest rate policy must come to an end this year.”
Negative since 2014
In 2014, the ECB lowered the so-called deposit rate to below zero percent for the first time. Since then, banks have had to pay penalty interest if they park excess funds at the central bank overnight.
The deposit rate is currently minus 0.5 percent. Since autumn 2019, however, the ECB has also granted banks exemptions, so that penalty interest is no longer due on all parked excess funds.
In view of persistently high inflation, the ECB is pushing ahead with the exit from its ultra-loose monetary policy. However, she leaves it open when interest rates will be raised.