The limit for penalty interest continues to fall: Not only are more and more banks charging fees for large assets that customers store. Some financial institutions want to strike with a credit of 5,000 euros or more. t-online gives you an overview.
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.
392 institutes are now charging percentage fees, Verivox counted at the end of September. 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 were charging negative interest rates on private assets at the end of August.
“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 slowed somewhat at the moment,” 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.
It will soon be more expensive at these banks
Five banks are now going particularly far: With them, customers have to pay penalty interest from an amount of 5,000 euros on the account. At the following banks, customers with a negative interest rate of 0.5 percent are affected:
- Degussa Bank
- Raiffeisenbank Augsburger Land West
- Volksbank Bochum-Witten
- Volksbank Bühl
One bank is pushing the penalty interest policy even further: customers of Ebase (European Bank for Financial Services) have to pay 0.5 percent penalty interest from a credit balance of 1,000 euros.
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.
Penalty interest affects new customers in particular
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 interest.
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. Quite a few financial institutions pass on the costs of negative interest to their customers.
Predominantly penalty interest applies to call money accounts
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 the 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.