Whoever saves money actually hopes that deposits will increase over time through interest. However, the opposite is becoming more and more the case: Now the first banks are charging negative interest without a tax-free allowance on private overnight money.
After the European Central Bank (ECB) pushed the interest rate for banks further into the red, banks are increasingly passing these costs on to their customers. The result is negative interest, which is now also levied on private overnight money.
VR-Bank Westmünsterland charges negative interest without an allowance
VR-Bank Westmünsterland has recently raised a negative interest rate of -0.5 percent without a tax-free allowance on private overnight money. There is also negative interest on balances in the checking account (also -0.5 percent) – but only from an individual allowance. That reports the consumer portal Verivox. This makes VR-Bank Westmünsterland the second bank after VR-Bank Fürstenfeldbruck, which has introduced negative interest on private overnight deposits without granting an exemption to savers.
“For a long time, wealthy private customers in particular were affected by negative interest rates. But this dam is broken,” says Oliver Maier, managing director of Verivox Finanzvergleich GmbH. “Over the next few weeks and months, we expect more banks to introduce negative interest rates. It will be harder for banks to evade the trend towards negative interest rates, at least when customers start to move deposits on a large scale.”
But there are also banks that do not charge negative interest rates, but instead charge monthly fees for their overnight accounts. According to Verivox, this results in de facto negative interest from the first euro, even if the bank shows 0.00 percent or 0.01 percent interest.
An overview of banks that charge negative interest
In response to the ECB’s low interest rate policy, the following banks have introduced negative interest on call money, according to their public price lists:
|Financial institution||Interest rate in percent||Allowance|
|Berliner Volksbank||-0.5||100,000 euros|
|Ethics bank||-0.4||100,000 euros|
|Oldenburgische Landesbank (OLB)||-0.4||100,000 euros|
|Sparda-Bank Berlin||-0.4||100,000 euros|
|Sparkasse Harburg-Buxtehude||-0.4||500,000 euros|
|Sparkasse Rotenburg-Osterholz||-0.5||1,000,000 euros|
|Volksbank Baden-Baden Rastatt||-0.2||500,000 euros|
|Volksbank Dresden-Bautzen||-0.5||1,000,000 euros|
|Volksbank Eisenberg||-0.4||100,000 euros|
|Volksbank Ettlingen||-0.5||250,000 euros|
|Volksbank Freiburg||-0.4||750,000 euros|
|Volksbank in the Ortenau||-0.13||100,000 euros|
|Volksbank Magdeburg||-0.5||75,000 euros|
|Volksbank Middle Black Forest||-0.5||250,000 euros|
|Volksbank Rhein-Nahe-Hunsrück||-0.5||100,000 euros|
|Volksbank Stendal||-0.4||100,000 euros|
|VR bank Alzenau||-0.4||N / A|
|VR Bank Bayreuth-Hof||-0.6||300,000 euros|
|VR-Bank Fürstenfeldbruch||-0.5||no allowance|
|VR Bank Landsberg-Ammersee||-0.4||300,000 euros|
|VR Bank Mittelachsen||-0.4||100,000 euros|
|VR Bank Westmünsterland||-0.5||no allowance|
However, there are also differences between the banks, so that there are a total of 23 banks with negative interest rates – in most cases with a quite high exemption. There are also seven banks where the overnight money account costs fees:
|Ethics bank||3.50 euros per month|
|GLS bank||5 euros per month|
|Kreissparkasse Stendal||N / A|
|Raiffeisenbank Unteres Vilstal||5 euros per month|
|Sparkasse Freyung-Grafenau||1 euro per month|
|Volksbank Eisenberg||3.50 euros per month|
|Volksbank Raiffeisenbank Lower Silesia||5 to 50 euros per month|
Since Verivox only evaluates conditions for private customers from a database with 800 banks, it may also be the case that other banks charge negative interest rates – even without an exemption.
How can you avoid negative interest?
According to Maier, when banks introduce a new negative interest rate, this only applies to new customers. “If a bank wants to charge negative interest from existing customers, it has to agree this individually with the customers concerned,” explains the expert. In individual cases, an individual letter of price adjustment may be sufficient.
“In this case, we advise savers to switch. Even in the current low interest rate, negative interest rates are not a natural law. Top banks in other EU countries currently pay 0.65 percent,” says Maier. “With German deposit insurance, there is still up to 0.31 percent.”
Ultimately, there are three rules you should follow to protect yourself from negative interest rates:
- Compare and change overnight money offers
- Don’t invest too much money as overnight money
- Invest the remaining savings correctly
Since low interest rates have become permanent, long-term investors should also consider alternatives in the stock market, advises Maier. “Anyone who has invested in the DAX and waited for at least 15 years has never been in the red and has an average annual return of over five percent.”