Lower allowances and higher penalty interest rates on call money or checking accounts: According to the comparison portal Verivox, credit institutions are increasingly tightening existing negative interest conditions for private customers. At the same time, the number of banks and savings banks that charge the so-called custody fee is increasing. 392 institutes counted Verivox at the end of the third quarter (conditions 29.9.). Since the beginning of the year, 214 financial institutions have been added. The consumer portal Biallo.de came last even on approximately 490 institutes, which require negative interest on private credit balances (conditions: 27.8.).

"We still see a great deal of momentum in negative interest rates, but while in the first half of the year new banks introduced deposit fees almost daily, this development has slowed down somewhat at the moment," explained Oliver Maier, Managing Director of Verivox Finanzvergleich GmbH. An end of the negative interest trend is not in sight, however. On the contrary: in the third quarter alone, 30 credit institutions had tightened existing regulations - 68 since the beginning of the year.

For a long time, a custody fee was due, especially for large sums of 100,000 euros or more. According to the evaluation, at least 135 institutions now charge negative interest from a total balance of 50,000 euros or less per customer. At some institutions, negative interest is already due from 5,000 euros or less.

Most savings banks and banks base the amount of the deposit fee on the 0.5 percent interest they have to pay on part of their excess deposits, which they park with the European Central Bank (ECB). However, 13 institutions charge 0.55 to 1 percent penalty interest on their retail customers' balances.

The negative interest rates mainly affect new customers. If a bank wants to charge existing customers a deposit fee, it must agree this with those affected on an individual basis. However, the Federation of German Consumer Organisations (vzbv) considers negative interest rates on current and call money accounts for consumers to be fundamentally unlawful - regardless of whether they are new or existing customers.

Since June 2014, commercial banks in the eurozone have had to pay interest when they park funds with the ECB. Currently, this deposit rate - known as the deposit facility in technical jargon - is minus 0.5 percent. For some time now, the central bank has been granting allowances for certain sums in order to relieve the institutions. Many banks pass on the costs of negative interest rates to their customers.

In this way, Germany's banks are able to reduce the burden of the ECB's monetary policy. Overall, the interest expense of domestic financial institutions in the deposit business is likely to have been reduced by around EUR 1.3 billion between the end of 2019 and the end of 2020, according to calculations by the Deutsche Bundesbank.

"The reduction in interest expense in the deposit business of around EUR 1.3 billion more than offset the net interest expense from the negative-interest deposit facility of just under EUR 1.0 billion in calendar year 2020," the Bundesbank summed up in its September monthly report.

Verivox evaluates the price notices published on the Internet by around 1300 banks and savings banks. Since not all institutions published their negative interest rates freely accessible on their websites, more than 392 banks are likely to charge custody fees. Predominantly, these apply to call money accounts, but in some cases they are also charged for checking and clearing accounts.

Photo by Nick Pampoukidis