Good news for bank customers: the end of negative interest rates on call money or overdraft facilities is approaching. The first financial institutions have already started to change.
The days of negative interest rates for money for talks and the like are almost over.
According to estimates by some 1,300 banks and savings banks, before the expected first increase in key interest rates in the euro area in eleven years, at least 49 financial institutions had fully or partially abolished the so-called personal trust fee. Verivox comparison portal. However, many are still waiting. In the face of the rapid rise in inflation, times still remain difficult for savers.
“The phenomenon of historical interest rates is coming to an end”
According to the data, at least 426 credit institutions still charge negative interest over certain amounts of funds on a call or current account (as of July 14). “As soon as the central bank abolishes penalty interest rates on bank deposits, negative interest rates for savers will also disappear,” expects Oliver Maier, Managing Director of Verivox Finanzvergleich GmbH. “The historical phenomenon of interest rates is ending.”
At its meeting next Thursday (21 July), the European Central Bank (ECB) intends to raise the main interest rates in the euro zone by 0.25 percentage points amid record inflation. This would be the first rate hike in eleven years. In September, the central bank presented the prospect of another – perhaps larger – rate hike. Banks still have to pay 0.5 percent. interest if they park their funds at the ECB. Many financial institutions pass the costs on to their customers.
Several large institutions, including Deutsche Bank, have announced that, in line with the ECB’s decisions, they will lower negative interest rates for their clients. According to Verivox, many banks and savings banks automatically lower their negative interest rates anyway in the event of an interest rate correction, as they clearly linked the deposit fee to the ECB’s deposit rate.
“If interest rates increase in the future, the savings business will become attractive for banks again. The first institutes are already positioning themselves for this, ”explained Maier.
The wave of negative interest rates is losing momentum
According to the assessment, since the end of April, 34 financial institutions have removed their negative interest rates completely. Discounts have been significantly increased in another 15 institutions, so that at least most customers no longer have to pay negative interest. Another institute decided to abolish it completely, and from August 1, the negative interest rates will no longer apply. Among the financial institutions that initiated the return, in addition to online banks, there are primarily many regional institutions, including several Sparda and PSD banks as well as Volksbanks and savings banks. According to the consumer portal Biallo.de, the wave of negative interest rates is also losing strength.
Custody fees are mainly for new clients. If a financial institution wants to demand negative interest from existing clients, it must individually agree with those concerned. Consumer ombudsmen generally believe that negative interest on private credit balances on checking and money market accounts is unacceptable, whether they are new or existing customers. Consequently, the Federation of German Consumer Organizations (vzbv) has filed lawsuits against various credit institutions.
The predictable end of negative interest rates is good news for bank customers. Savers can also count on an increase in interest rates on term deposits etc. due to the change in ECB interest rates. However, high inflation is now chewing on savings. Throughout 2022, the Deutsche Bundesbank expects an inflation rate of 7.1 percent. in the largest economy in Europe.
Verivox evaluates the terms and conditions for money calls, transfers and settlements with approximately 1,300 banks and savings banks online. As not all institutions publish their negative interest rates freely available on their websites, there may be other institutions that charge negative interest rates or have already abolished them. (dpa)