Where do banks store their money?

Rising negative interest rates and falling allowances - you should know that

  • As a result of the interest rate policy of the European Central Bank, the business with deposits is no longer profitable for banks. They are now passing on the negative interest rates of the ECB to customers.
  • It differs from what amount the banks charge a penalty interest - and how high it is. The negative interest rate often only applies to new customers, but long-term customers are now also affected.
  • The finance portal Biallo examined 1,300 banks and savings banks. The result: More and more people are taking negative interest even for smaller amounts - 21 of them from the first euro.

Many Germans continue to shy away from the stock market. They leave their money in the current or overnight account, but there has been no interest for years. Worse still, you even have to pay penalty interest on money in your account. In addition to inflation, the penalty interest also causes the money in some accounts to continue to lose value.

Just last week, a new regulation came into force at Sparda-Bank: negative interest rates for all customers who have more than 25,000 euros on their accounts. It can hurt. Until now, negative interest rates have been common with a balance of around 100,000 euros on the account. With this sum, the customer loses at least 500 euros per year at the estimated -0.5 percent interest. The devaluation of money due to inflation has not yet been included here.

Sparda-Bank is not the only bank that charges negative interest and further lowers the tax exemption. Hamburger Sparkasse has also already lowered the tax exemption to 50,000, which is likely to affect some customers.

Penalty interest of 1 percent

“The PSD Bank Rhein-Ruhr also caused a stir. There are staggered negative interest rates on the overnight money. From 100,000 euros new customers pay 0.5 percent and from 500,000 euros a full 1.0 percent penalty interest, ”says Sebastian Schick to Business Insider. Schick is an investment expert at Biallo, a consumer portal for private finances. This makes the PSD Rhein-Ruhr the bank that demands the highest penalty interest on call money accounts.

But money that is in German checking accounts already earns negative interest, explains Schick. “We have 21 banks, the long ones from the first euro to. It is mostly the money in the call money account, but current accounts are also affected. Bank 1 Saar even charges a penalty interest rate for current accounts that have been opened. A penalty interest of 0.75 percent is due from 10,000 euros. "

According to research by Biallo, the 21 banks include: Kreissparkasse Stendal, Mainzer Bank, Märkische Bank, Oldenburgische Landesbank, Raiffeisenbank Aichhalden-Hardt-Sulgen, Raiffeisenbank Bibertgrund
Raiffeisenbank Bobingen, Raiffeisenbank in the Upper Palatinate Jura, Raiffeisen - my bank eG (Hipoltstein), Raiffeisenbank Neumarkt i.d. Upper Palatinate
Raiffeisenbank Stauden, Sparkasse Ingolstadt Eichstätt, Sparkasse Kulmbach-Kronach, Volksbank Dortmund-Nordwest, Volksbank Hameln-Stadthagen, Volksbank Schermbeck, Volksbank Zwickau, VR Bank Neuburg-Rain, VR-Bank Neu-Ulm, VR Bank Weimar
and VR Bank Westmünsterland.

Negative interest rates are usually rare at savings banks and Volksbanks - at least for existing customers, according to Schick. The Volksbanken and Sparkassen, which charge a penalty interest rate, often do this for new customers from the first euro, as the list above shows.

But the tide is slowly turning at the savings banks and Volksbanks as well. The whole thing is a process and allowances can continue to decrease in the future and negative interest rates may apply. The Düsseldorfer Sparkasse drew attention to itself when long-term customers who exceeded the allowance were terminated. They didn't want to accept the bank's negative interest rate.

"There are cases where banks put a pistol on their customers' chests and say, either you withdraw the money or we will give you notice. And that also applies to long-term customers," says Schick.

Alternative: current account abroad

If you want to avoid the penalty interest, it is worth taking a look abroad. In Europe there are still some banks that even pay slightly positive interest rates. Schick knows some banks that still pay interest: “You can still get overnight rate offers of up to 0.5 percent, such as from the Santander subsidiary Openbank or the Bank of Scotland. But that is not guaranteed in the long term either. The Luxembourg Advanzia Bank, for example, currently offers an interest rate of 0.2 percent. "

The banks use negative interest rates as a deterrent. The enormous deposits in citizens' accounts, created by the high savings rate, are currently a burden for the banks. The banks store the money on a daily basis at the European Central Bank - however, the banks only have an allowance, after which they have to pay penalty interest. In order not to increase the deposit quota even further, banks therefore use negative interest to deter customers who just want to store their money.

Legally a difficult situation

Legally, the situation is quite controversial, because banks are actually not allowed to ask for custody money if they also charge account management costs. This can only be regulated as an exception in individual contracts. However, individual contracts with banks are rare. Either you sign the ready-made contract or you have to look for another bank.

It is difficult to predict whether negative interest rates will disappear in the future, because that depends largely on the interest rate policy of the European Central Bank. Inflation influenced by the ECB also plays a crucial role. “Should that rise, interest rates could rise again. But there will probably no longer be high interest rates like in the past, ”says Schick.