More and more banks are charging negative interest rates on their accounts. Now a large direct bank is following suit: new customers with high credit balances must expect penalty interest.
The next German direct bank has introduced penalty interest on the current account. The Deutsche Kreditbank (DKB) announced that new customers have to pay a “custody fee” of 0.5 percent on all credit balances exceeding 100,000 euros. Such a custody fee is de facto equivalent to penalty interest.
For the time being, nothing will change for existing customers. The direct bank wants them too Negative interest calculate, it must agree this individually with the existing customers. With this, the DKB is reacting “to the usual market developments as a result of the persistent low interest rate phase”.
Commercial banks have to pay 0.5 percent interest when they park excess funds with the European Central Bank (ECB). Even if there are tax exemptions for certain sums, that remains a billion dollar burden for the industry.
More and more banks are charging penalty interest
More and more financial institutions are passing the costs on and charging customers negative interest – sometimes from the first euro. According to an evaluation by the comparison portal Verivox, a total of 166 banks and savings banks in Germany show negative interest rates for private customers in their price notices. 47 of these offer significantly lower allowances than 100,000 euros.
Also the direct competitor of the DKB, the direct bank ING announced at the beginning of November a negative interest rate for high savings deposits – also for new customers.