Whether negative interest rates are even permissible for bank customers is a matter of legal controversy. Nevertheless, since the beginning of the year, other financial institutions have introduced the custody fee, as an evaluation shows. Now consumers have to hope for the courts – and for the ECB.
The number of banks charging negative interest rates from their customers has reached a new record. The finance portal has determined that 561 banks and savings banks are currently collecting negative interest from private customers. This is even required by 581 financial institutions for corporate customers. Around a dozen institutes have been added to the list since the beginning of the year.
Nevertheless, the wave of negative interest rates seems to be abating somewhat, notes Biallo. Because a year ago, a good 30 financial institutions introduced the so-called custody fee in the same period. A total of around 300 banks and savings banks had demanded negative interest rates for the first time in 2021. Biallo regularly examines the conditions of around 1,300 financial institutions.
First court judgments
The fact that more banks have not jumped on the negative interest bandwagon could be due to the fact that it is currently completely unclear whether they are permissible at all. Consumer advocates have launched a series of lawsuits to ban the banks’ fashionable practice. And in two cases they have already been right.
The regional courts in Berlin (Az. 16 O43/21) and Düsseldorf (Az. 12 O 34/21) decided after complaints from the Federal Association of Consumer Organizations that negative interest on bank balances is not permissible, since storing the money is not an extra service acts. The Leipzig Regional Court, on the other hand, considers the introduction of custody fees to be legal (Az. 5 O 640/20). The whole practice is currently in legal limbo, presumably until a supreme court clarification by the Federal Court of Justice.
Allowances continue to fall
The Biallo analysis of various banking groups shows how widespread negative interest rates are now in the entire banking sector. Almost half of the 367 regional savings banks now collect custody fees. Almost two-thirds of private banks have introduced negative interest rates and even three-quarters of direct banks without their own branch network. The cooperative banks (Volks- und Raiffeisenbanken, PSD- and Sparda-Banken) have been the most reluctant so far, but around 40 percent are already taking action.
According to the evaluation, the amount of savings from which the negative interest applies continues to decrease. In the past, allowances of 100,000 euros often applied, but today the limit at many banks is 50,000 euros or 25,000 euros. Some even charge negative interest from the first euro.
The second largest German direct bank, DKB, is representative of this development: On November 10, it lowered the allowance for new customers on call money and current accounts from EUR 50,000 to EUR 25,000. A year ago it was 100,000 euros per account. At some banks, negative interest rates only apply to new customers, but existing customers are also being bothered with it more and more often: those who do not want to agree are threatened with termination.
Interest rate turnaround coming?
However, there is also hope for consumers, because the European Central Bank could also help savers in addition to the courts. This had recently indicated that it was at least considering moving away from its strict zero and negative interest rate policy for 2022. And if the key interest rates actually rise again, many banks are likely to cancel their negative interest rates for bank customers again.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
