Frankfurt The interest rate hike by the European Central Bank (ECB) puts an end to negative interest rates for private bank customers. At most banks and savings banks, the custody fee for current and call money accounts will be eliminated immediately or in a few days.
With its interest rate decision, the ECB is raising the deposit interest rate, which is crucial for banks, from minus 0.5 percent to zero percent. In addition, the key interest rate will rise from zero to 0.5 percent, as the central bank announced on Thursday afternoon.
Deutsche Bank, the largest German financial institution, announced immediately afterwards that it would refrain from negative interest rates. Deutsche Bank and Postbank would “abolish the custody fee in the course of August,” said a spokesman for Deutsche Bank on request.
A number of financial institutions have linked the custody fee for private customers to the ECB deposit rate and have to react in the same way – sometimes even immediately. Hamburger Sparkasse, Germany’s largest savings bank, automatically adjusts the conditions.
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From Friday, customers with large deposits will no longer be charged negative interest. The Apotheker- und Ärztebank (Apobank), the largest cooperative bank after the central institute DZ Bank, will pass on the interest rate hike directly on Friday, as the bank explained.
The trend towards custody fees emerged in 2016
ING Germany now wants to pay more interest again to long-term savers. From August, the online bank will be offering its existing customers a savings bond with terms of between one and five years. There is an annual interest rate of 0.5 percent to 1.5 percent, said the ING. The investment is possible from an amount of 2500 euros up to a maximum of 500,000 euros.
ING had already advanced in mid-May. At the time, it was the first large private customer bank to announce that it would abolish the custody fee for the vast majority of customers. As of July, the allowances for credit balances on current and call accounts increased from 50,000 to 500,000 euros.
The first banks with negative interest rates for wealthy private customers became known in autumn 2016. The custody fees usually apply above certain allowances – for example 50,000 or 100,000 euros – for new and existing customers. For new customers, the calculation of custody fees was determined when the contract was opened.
Banks and savings banks need the explicit consent of existing customers to charge negative interest. Banks often argued that this was a way to fend off another large inflow of deposits.
However, it is controversial whether banks are allowed to charge negative interest rates at all from private customers. The Federal Association of Consumers has sued in several cases.
Some credit institutions had already abolished the custody fee in anticipation of interest rate increases. Shortly before the ECB interest rate hike, the comparison portal Verivox registered 51 credit institutions with a view to the online price lists that had eliminated negative interest rates or significantly increased the allowances. At the beginning of June there were still nine banks.
Most recently, Verivox still counted around 424 and thus a third of the financial institutions examined with negative interest rates for private customers. In fact, the number is likely to be even higher because not all conditions are published freely accessible on the Internet.
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