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300 Banks in Germany Charge Negative Interest Rates Including Deutsche Bank, Commerzbank, ING

300 Banks in Germany Charge Negative Interest Rates Including Deutsche Bank, Commerzbank, ING

A brand new report reveals that greater than 300 banks in Germany at the moment are charging some prospects unfavorable rates of interest. Some are large international banks, together with Deutsche Bank, Commerzbank, and ING.

300 Banks Pass on the Burden of Negative Interest Rates to Customers

Banks in Germany have been more and more passing on the burden of unfavorable rates of interest to their shoppers after the European Central Bank (ECB) adopted a unfavorable rate of interest coverage. After reducing one among its key rates of interest into unfavorable territory in June 2014, the ECB then lowered the deposit facility price incrementally till it reached the present price of -0.5% in September 2019.

A German monetary product comparability portal, Biallo, carried out a examine on 1,300 banks and financial savings banks in Germany. It discovered that “More than 300 monetary establishments cost a few of their prospects unfavorable curiosity,” the portal reported final week. Out of those banks, nearly 200 of them impose unfavorable rates of interest on personal prospects. The charges and phrases fluctuate by financial institution.

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Biallo founder Horst Biallo described:

The wave of unfavorable rates of interest that’s at present rolling in direction of savers is rising steadily. Almost 30 banks and financial savings banks have launched a so-called custody charge because the starting of October alone.

He defined that “Banks and financial savings banks normally keep away from the phrases ‘unfavorable curiosity’ or ‘penalty curiosity,’” including that “they like to talk of the so-called custody charge.”

While noting that extra banks are charging their enterprise and company prospects unfavorable rates of interest than they do personal prospects, Biallo emphasised that “This yr alone, greater than 150 banks and financial savings banks launched unfavorable rates of interest for personal prospects.” Each financial institution units its personal phrases relating to which accounts are charged unfavorable rates of interest, with the most typical kind of accounts being these with balances above 100,000 euros ($118,353). Most banks additionally apply unfavorable rates of interest to new accounts as German regulation requires prospects’ consent for imposing unfavorable rates of interest on present accounts.

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Among international banks on the Biallo’s unfavorable price checklist are Comdirect, Commerzbank, DAB BNP Paribas, Deutsche Bank, DKB, Donner und Reuschel, Ethikbank, Fidor Bank, Flatex Bank, GLS Bank, ING, Norisbank, and Postbank. Most of them apply a -0.5% rate of interest on accounts with balances over differing quantities.

Other banks on the Biallo checklist embody Bank 1 Saar, Berliner Sparkasse, Brandenburger Bank, Bremische Volksbank, Eckernförder Bank, Erfurter Bank, Kasseler Sparkasse, Münchner Bank, Raiffeisenbank Eifeltor, Sparkasse Aachen, Sparkasse Landshut and extra. Bank 1 Saar prices -0.75% on accounts over 100,000 euros — the very best penalty price charged by any financial institution.

Big Banks Imposing Negative Interest Rates

Some of the biggest banks in Germany have additionally launched unfavorable rates of interest. The newest main financial institution to take action is ING. According to the financial institution’s checklist of costs and companies, a custody charge of 0.5% shall be charged beginning on Feb. 1, 2021, for present accounts opened after Nov. four if they’ve balances of over 100,000 euros.

Deutsche Bank has already been charging some shoppers a custody charge of 0.5% on present accounts with balances above 100,000 euros. In its phrases of service, Deutsche Bank wrote that it “shall agree on the applying of those particular situations and the duty to pay the custody charge individually with the client.”

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Commerzbank launched a custody charge of 0.5% for deposits of over 250,000 euros on the finish of the 2019 monetary yr. Biallo famous {that a} unfavorable rate of interest applies to accounts opened after July 1 and the deposit threshold was lowered on Oct. 1 to 100,000 euros.

The Association of German Banks, the principle foyer group for Germany’s monetary sector, just lately known as on the ECB to rethink its unfavorable rate of interest coverage. Hans-Walter Peters, the president of the affiliation, warned that extra banks shall be compelled to cost their prospects unfavorable rates of interest.

What do you consider banks charging unfavorable rates of interest? Let us know within the feedback part under.

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