Frankfurt Court Ruling: Banks Must Notify Customers of Illegal Negative Interest Rates

Mon 21st Jul, 2025

The Oberlandesgericht Frankfurt has ruled that banks are required to inform their customers about any illegal negative interest rates applied to their savings accounts. This decision follows a landmark judgment by the Bundesgerichtshof, which effectively banned negative interest rates on savings and overnight deposit accounts.

As a result of this ruling, customers who have been subjected to negative interest rates may soon receive official notifications from their banks. The court's decision mandates that banks must provide individual notifications to affected customers, clarifying how their terms of service have changed. This is particularly important for older clients who may not be as familiar with online banking practices.

The court emphasized that simply updating the general terms and conditions or posting information on online banking platforms is insufficient. Affected customers must be notified through direct communication, such as letters or emails, to ensure that they fully understand the implications of the changes.

In February, the Bundesgerichtshof ruled that negative interest rates, often referred to as storage fees, cannot be applied to savings and overnight deposit accounts. Many banks had imposed these fees during the prolonged low-interest rate environment, which were a consequence of their own obligations to the European Central Bank.

Consumers are not entitled to automatic refunds for the illegally charged fees. Instead, they must actively pursue their claims against their banks. The recent ruling provides a framework for banks to notify customers, which could encourage individuals to assert their rights regarding these charges. The bank in question now has a two-month period to send out these notifications.

This ruling aims to protect consumers, particularly those who may be less technologically adept, ensuring they are not misled regarding their financial agreements. It also seeks to correct any misconceptions surrounding the legal status of negative interest charges.

As the financial landscape continues to evolve, this decision reinforces the need for transparency and accountability among banking institutions, fostering a more informed consumer base.


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