Many banks charge negative interest even on average balances

Lower discounts and higher penalty interest rates on calls for funds or current accounts: according to the comparison portal Verivox, credit institutions are increasingly tightening the existing negative interest conditions for customers private. At the same time, the number of banks and savings banks that charge so-called custody fees is increasing. 392 institutes had Verivox at the end of the third quarter (conditions 29.9.). Since the start of the year, 214 financial institutions have been added. The consumer portal Biallo.de came last even on about 490 institutes, which charge negative interest on private credit balances (conditions: 27.8.).

“We still see great negative interest rate dynamics, but while in the first half of the year the new banks introduced deposit fees almost daily, that development has slowed down somewhat for now.” , explained Oliver Maier, CEO of Verivox. Finanzvergleich GmbH. The end of the negative interest rate trend is not in sight, however. On the contrary: in the third quarter alone, 30 credit institutions tightened existing regulations – 68 since the start of the year.

For a long time, custody fees were due, especially for large sums of 100,000 euros or more. According to the assessment, at least 135 establishments now charge negative interest on a total balance of 50,000 euros or less per customer. In some establishments, negative interest is already due from 5,000 euros or less.

Most savings banks and banks base the amount of the deposit fee on the 0.5% interest they have to pay on part of their excess deposits, which they place with the European Central Bank (BCE). However, 13 institutions charge 0.55 to 1% penalty interest on their retail customer balances.

Negative interest rates mainly affect new customers. If a bank wishes to charge a deposit fee to existing customers, it should agree with the relevant people on an individual basis. However, the Federation of German Consumer Organizations (vzbv) considers negative interest rates on current and current accounts of consumers to be fundamentally illegal, whether they are new or existing customers.

Since June 2014, commercial banks in the euro area have to pay interest when placing funds with the ECB. Currently, that deposit rate – known as the deposit facility in technical jargon – is minus 0.5%. For some time now, the central bank has granted allowances for certain sums in order to relieve the pressure on the institutions. Many banks pass the costs of negative interest rates on to their customers.

German banks are thus in a position to lighten the burden of the ECB’s monetary policy. Overall, the interest charges of domestic financial institutions in the deposit sector would likely have been reduced by around 1.3 billion euros between the end of 2019 and the end of 2020, according to calculations by the Deutsche Bundesbank.

“The reduction in interest charges in the deposits sector of around 1.3 billion euros more than offset the net interest charges on the negative interest deposit facility of just under 1.0 billion euros in calendar year 2020 “, summed up the Bundesbank in its September monthly report. .

Verivox evaluates the price notices published on the Internet by around 1,300 banks and savings banks. As not all institutions have published their negative interest rates freely available on their websites, more than 392 banks are likely to charge custody fees. They mainly apply to sight money accounts, but in some cases they are also charged for checking and clearing accounts.

Photo by Nick Pampoukidis