Frankfurt The European Central Bank (ECB) has nurtured hopes of an imminent turnaround in interest rates. Step by step, it should then also do without the negative interest rates for deposits from commercial banks. Will this also eliminate the unpopular negative interest rates that many credit institutions are currently charging?
The Handelsblatt asked 20 banks this question – and received very different answers. Only six banks gave a clearly positive response from the customer’s point of view. The Hamburger Sparkasse is one of them: “Should the deposit rate of the ECB change, we would adjust our conditions accordingly. This applies to private and corporate customers.”
The Frankfurter Volksbank also makes a clear statement: “Custody fees are contractually regulated with us. The contractual provisions stipulate that the amount of the custody fee is linked directly to the interest rate of the ECB and is adjusted accordingly in the event of changes at the ECB.”
Apobank, the largest cooperative bank after the central institute DZ Bank, also wants to align itself with the ECB interest rate: “For private customers, we only intend to collect custody fees as long as the ECB interest rate for the deposit facility is negative.”
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The Frankfurter Sparkasse, the Mittelbrandenburgische Sparkasse Potsdam and the Nassauische Sparkasse from Wiesbaden also responded in this spirit.
reaction with a time lag
The Kreissparkasse Köln is also planning to move away from the custody fee. It will “probably react with some time lag to possible ECB interest rate hikes”. The point in time depends above all on the development of money market and capital market interest rates.
ECB President Christine Lagarde indicated at the beginning of February that there could be a clear shift towards a tougher monetary policy in March and that interest rate hikes could no longer be ruled out this year. Lagarde had previously emphasized that a turnaround in interest rates in 2022 was very unlikely. Most recently, she spoke of gradual adjustments.
Although the turnaround in interest rates is now within reach, most banks did not want to commit themselves in the survey to whether they would immediately cancel the negative interest rates for customers if the ECB penalty interest on custody fees were removed. A number of houses regard the question as premature.
>> Read more here: High inflation, a lot of criticism – The difficult relationship between the head of the ECB and the public
Commerzbank, for example, explains: The question can only be answered “when the ECB has actually abolished negative interest rates”.
In the event of interest rate changes, Deutsche Bank wants to “immediately check to what extent it can adjust product conditions in German private customer business accordingly”. That also applies to your Postbank brand.
Sparda-Bank remains cautious
Sparda-Bank West from Düsseldorf is a little more reserved in comparison: “Only when the ECB actually abolishes negative interest rates for banks will we carefully examine what consequences this development can have in our customer business,” she replies.
On the other hand, the online bank ING refers to the long-term nature of the ECB’s plans: “We expect the ECB to raise the deposit rate for the first time shortly before the end of the year. By early next year, the ECB could then have ended the era of negative deposit rates.”
With such a slow turnaround in interest rates, long-term lending rates would probably first rise before short-term deposits or savings accounts would start earning interest again, says ING. She also believes that concrete plans to abolish the custody fee are too early.
433 banks and savings banks charge negative interest
More and more financial institutions in Germany are demanding negative interest from their customers above a certain deposit amount. Their number had more than doubled in 2021. In the meantime, 433 banks and savings banks are charging negative interest on call money and current accounts, as the comparison portal Verivox has determined with a view to the price notices. This corresponds to a third of the banks and savings banks examined. In fact, there are likely to be significantly more banks, because not all banking conditions are freely accessible on the Internet.
22 financial institutions charge a fee for the call money account, which is usually free of charge, sometimes in addition to negative interest. The negative interest usually takes effect above an allowance of 100,000 or 50,000 euros, sometimes even from 10,000 euros. Both new and existing customers are affected. Banks also charge custody fees to many major customers, companies and municipalities.
The Sparda-Bank Baden-Württemberg stands out as a positive exception among the 20 financial institutions. It does not charge negative interest. However, the bank explains that it is preparing to approach individual customers in a targeted manner in order to talk to them about the alternative to custody fees.
Despite the currently rather reserved answers from many banks, many market experts assume that the negative interest rates in the banking industry will gradually be abolished again as soon as the first financial institutions free their customers from them.
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