Penalty interest Verivox: Increasingly medium balances affected by negative interest
The savings on the account are decreasing. More and more credit institutions are humming penalty interest rates for private customers and tightening the conditions.
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). Accordingly, 214 financial institutions have been added since the beginning of the year. 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 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 more than 100,000 euros. 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 5000 euros 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 debit the credit balances of their private customers with 0.55 to 1 percent penalty interest.
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. The Federation of German Consumer Organizations (vzbv) considers negative interest rates on current accounts and call money 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 had to pay interest when they deposit funds with the ECB park. 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 for the negative interest to their customers.
Germany’s banks are thus able to cope with the burdens from the ECB monetary policy to decrease. According to calculations by the Deutsche Bundesbank , between the end of 2019 and the end of 2020, the interest expense of the domestic financial institutions in the deposit business is likely to increase reduced by around 1.3 billion euros. “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,” summed up the Bundesbank in the September monthly report.
Verivox evaluates the price notices published on the Internet by around 1300 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.
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