Frankfurt / Main Lower allowances and higher penalty interest on the overnight or current account: According to the comparison portal Verivox, credit institutions are increasingly tightening existing negative interest conditions for private customers. At the same time, the number of banks and savings banks that charge the so-called custody fee is increasing. Verivox counted 392 institutes at the end of the third quarter (as of September 29). Since the beginning of the year, 214 banks have been added. The consumer portal Biallo.de recently even came to around 490 institutes that charge negative interest on private credit (as of August 27).
“We are still seeing great dynamism in negative interest rates, but while new banks introduced custody fees almost every day in the first half of the year, this development has currently slowed down somewhat”, explained Oliver Maier, Managing Director of Verivox Finanzvergleich GmbH. An end to the negative interest rate trend is not in sight. On the contrary: in the third quarter alone, 30 credit institutions tightened existing regulations – 68 since the beginning of the year.
For a long time, a custody fee was due, especially for large sums of 100,000 euros or more. According to the evaluation, at least 135 institutes are now charging negative interest from a total credit of 50,000 euros or less per customer. At some institutes, negative interest rates of EUR 5000 or less are due.
Most savings banks and banks base the amount of the custody fee on the interest of 0.5 percent that they have to pay on part of their excess deposits that they park at the European Central Bank (ECB). However, 13 institutes charge their private customers’ credit balances with 0.55 to 1 percent penalty interest.
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Especially new customers affected
The negative interest mainly affects new customers. If a bank wants to demand a custody fee from existing customers, it must agree this individually with the parties concerned. However, the Federation of German Consumer Organizations (vzbv) considers negative interest rates on current and overnight accounts of consumers to be fundamentally inadmissible – regardless of whether they are new or existing customers.
Since June 2014 commercial banks in the euro area have to pay interest when they park money with the ECB. This deposit rate – known in technical jargon as the deposit facility – is currently minus 0.5 percent. For some time now, the central bank has been granting allowances for certain sums in order to relieve the institutions. A number of financial institutions pass on the costs of negative interest to their customers.
Germany’s banks are thus able to reduce the burdens from the ECB’s monetary policy. Overall, according to calculations by the Deutsche Bundesbank, the interest expense of domestic financial institutions in the deposit business is likely to have decreased by around 1.3 billion euros between the end of 2019 and the end of 2020. “The reduction in interest expense in the deposit business of around 1.3 billion euros more than offset the net interest expense due to the negative interest deposit facility of just under 1.0 billion euros in the 2020 calendar year,” summarized the Bundesbank in its September monthly report.
Verivox evaluates the price notices published on the Internet by around 1,300 banks and savings banks. Since not all institutions published their negative interest rates freely on their website, more than 392 banks are likely to charge custody fees. These mainly apply to call money accounts, but they are also partly charged for current and clearing accounts.
More: Direct bank ING: If you do not agree to the new fees, you can expect the account to be terminated