In the meantime, other financial institutions have taken the step or are about to do so. Postbank has terminated some customers’ accounts because they did not agree to negative interest rates. This was confirmed to the Handelsblatt. Postbank is part of Deutsche Bank.
Sparkasse Dortmund has also terminated customers for this reason. ING announced layoffs for the coming month.
This shows that financial institutions are actually going through with the calculation of negative interest for wealthy existing customers. A significant number of German credit institutions charge custody fees, often from sums of 50,000 euros on call money and giro accounts.
“An amicable solution could be found with the vast majority of affected customers,” said a spokesman for Deutsche Bank. “To our regret, we have to end the banking relationship with the few customers who, after completing the multi-stage approach process, did not want to agree on a suitable investment alternative or a custody fee with us.”
The Sparkasse Dortmund has also announced layoffs
Since spring 2021, existing Postbank and Deutsche Bank customers have been gradually approached about suitable investment alternatives or individual agreements on custody fees, the spokesman said. “The aim is to find suitable solutions for dealing with the high deposits of existing customers with account balances of more than EUR 50,000.”
In one case that the Handelsblatt is aware of, Postbank terminated the customer’s accounts at the end of November 2021. At the end of January 2022, she then wrote to him that the account would be blocked at the beginning of February.
Sparkasse Dortmund is also about individual cases. The Sparkasse terminated 15 customers due to the custody fee. The majority of them “reacted to the notice of change by the savings bank by ending their business relationship,” explains the bank. In total, it counts 330,000 customers. The “Ruhr Nachrichten” reported last week that the Sparkasse canceled all accounts for a customer for mid-May.
ING, in turn, is targeting layoffs in the coming weeks. “In the case of a low four-digit number of customers who have not agreed even after repeated reminders, we will now take this step and terminate them in April 2022 with a reasonable period of notice,” said the online bank on request.
Other financial institutions, on the other hand, have not yet announced any terminations, such as Commerzbank. “We see that we can find good common solutions,” said a Commerzbank spokesman. According to CEO Johannes Evers, Berliner Sparkasse has not yet resigned either.
At least a third of the financial institutions require negative interest rates
It is obvious, however, that further layoffs will follow. At least 449 financial institutions are now charging negative interest on call money and checking accounts, as the comparison portal Verivox has determined with a view to the price displays.
In addition, some financial institutions charge fees for the usually free money market accounts. This corresponds to more than a third of the banks and savings banks surveyed. In fact, there are likely to be significantly more banks, because not all publish the conditions freely accessible on the Internet.
The allowances have recently fallen many times. According to Verivox, 40 percent of the credit institutions limit the total allowance per customer to 50,000 euros or less. The reason given by the industry for introducing negative interest rates is the penalty interest rate of 0.5 percent that it has to pay to the European Central Bank (ECB) for short-term deposits.
>> Read here: Rising risk of stagflation? This allows investors to adjust their portfolio
Securities sales and credit institutions’ net commission income shot up in 2021. This is an indication that numerous bank customers have actually invested more in funds and shares. The money houses refer to the agreements with the customers.
Consumer advocates consider custody fees to be inadmissible
However, it is controversial whether credit institutions are allowed to charge negative interest at all. Consumer advocates are taking action. The Federation of German Consumer Organizations (VZBV) believes that custody fees on current and money market accounts are generally not permitted and is suing five banks. In some cases, the VZBV was already right before the regional courts, the proceedings are now in the next instance.
ING continues to hope to convince customers who have not previously endorsed negative rates. “We are very confident that the vast majority of customers will make up for it without consent.”
At the Stadtsparkasse Düsseldorf, some of the customers who had already received the account termination also reacted. Ultimately, the money house passed on the accounts of five customers who had not even reported to the district court. After the second round of terminations, five accounts ended up with the district court, which in turn has an account with the Bundesbank.
After all, there are chances of an end to custody fees. A number of financial institutions want to abolish negative interest rates for private customers, even if the ECB refrains from penalty interest. These include Hamburger Sparkasse, Apobank, ING and DKB.
More: DKB promises the end of penalty interest in step with the ECB