ECB decision sets the direction
Deutsche Bank announces the end of negative interest rates
06/13/2022, 11:50 a.m
Last week, the European Central Bank announced the first rate hike since 2011. Deutsche Bank and Postbank want to pass this development on to their customers. Commerzbank does not want to commit itself yet.
Bank customers in Germany can hope for an end to negative interest rates on current or overnight accounts. “The amount of the custody fee is based on the so-called deposit facility of the European Central Bank,” comments a spokesman for Germany’s largest bank on the interest rate hike announced for July by the European Central Bank. “If the ECB raises the deposit facility rate by 0.25 percentage points as per its recent announcement, Deutsche Bank and Postbank will pass this adjustment on to their retail customers and reduce the custody fee by 0.25 percentage points.”
The Governing Council of the ECB decided on Thursday to raise key interest rates in the euro area by 0.25 percentage points at its next meeting on July 21. It would be the first increase since 2011. Another step is to follow in September, which will probably be even larger.
Currently, banks have to pay 0.5 percent interest themselves if they park funds at the ECB. A number of institutes pass the costs on to their customers. “If the deposit facility rate is raised to zero or positive in a second step, we will no longer charge a custody fee in retail banking,” said the Deutsche Bank spokesman.
451 banks to reach
Since mid-May 2020, Deutsche Bank has been charging so-called custody fees in its private customer business. Currently, customers there have to pay negative interest from 50,000 euros on current and investment accounts and from 25,000 euros for overnight money. It is the same with Postbank, which belongs to the Deutsche Bank Group.
Commerzbank, on the other hand, does not want to specify when it will reduce its custody fees for customers with large deposits. The bank is waiting for the next ECB decisions, said a spokesman for the Frankfurt institute on request. Commerzbank boss Manfred Knof said in mid-May: “If the ECB reacts, then we can and will react quickly.” The direct bank ING Germany pushed ahead on May 10 and had committed to abolishing negative interest rates for almost all of its private customers by July 1.
According to the comparison portal Verivox, at least 451 of the approximately 1,300 banks evaluated in Germany are currently demanding negative interest rates from private customers (as of June 8, 2022). The Internet portal Biallo even counts 582 banks and savings banks that collect negative interest from private customers (as of June 9, 2022).