Who brings his money to the bank, get something for it. This seemingly brazen principle no longer applies – at least not for customers with very much money in the account. Commerzbank introduces the first major German bank a negative interest rates on the balances of large enterprise customers. The money in the account would then no longer proliferate, but are less.
So a “credit charge” is keep that since the financial crisis teilverstaatlichte financial institution “in single large corporate customers with high balances as well as for large corporations and institutional investors “before, says a spokesman. However, this should be an issue only for enterprise customers who are at least high double-digit million amount in their checking or savings account.
These customers to lead now discussions, whether the money can not redeploy about in longer-term time deposits. Actually requires the institution to have the charge by his own admission yet by any customers. “For private, corporate and SME customers are basically no negative interest rates planned,” says the spokesman.
However, the excitement is great. After the subject negative interest many customers so far rather appeared as a theoretical thought experiment, it is by now arrived in the consciousness of savers and investors. You wonder how banks ever come up with the idea to charge for savings. And if they themselves are soon affected. The “world” answered the pressing questions.
Why a bank requires negative interest rates?
Because the banks themselves now also have to pay money if they want to park cash in the short term. Trigger for this is the interest rate policy of the European Central Bank (ECB). To combat the weak economy and the extremely low rate of inflation in the euro area, it has its interest rates still further.
The key performance indicators including the deposit rate, which states under what conditions banks can park their surplus money with the central bank overnight. In June, the ECB lowered for the first time this set below zero to minus 0.1 percent. In September it went down to minus 0.2 percent.
Why is the ECB, this policy so crucial?
While banks do not bring any euros, they do not just need necessarily to the Central Bank. But the key ECB interest rates are very reason why so called because they affect the interest rate environment at the market as a whole. So the banks could park excess liquidity with other banks. But the interest rates for such transactions between banks overnight are now negative
And also government bonds with excellent credit are no longer an alternative. Yields on government bonds to to four years duration were in the last few months regularly in the minus range. As paradoxical as it sounds: if someone wants to borrow Wolfgang Schäuble money to pay for it
Which banks already require negative interest rates
Among Europe’s major banks have been the Swiss Credit Suisse and the British HSBC announced to charge high fees with customer deposits. In the small DZ private bank in Luxembourg, a subsidiary of the German DZ Bank, insurance companies, pension funds and other institutional customers need to pay a negative interest rate of 0.25 percent.
Even some US wholesale houses, such as Goldman Sachs, JP Morgan, State Street and Bank of New York Mellon (BNY), are confronted with the issue. BNY example, since October 1, wholesale calculated on deposits in EUR a penalty interest rate of 0.2 percent.
Which German money house will follow the Commerzbank?
particularly with a view to major customers in this country is likely to become as good as any bank provide at least the question of how they deal with the new interest rate environment. Finally, in a large group are fast times hundreds of millions on current accounts. Currently, these assets cost the bank money every day
Since it is obvious to negotiate with the customer, whether not reduce somewhat the cash balance would -. Or you agrees just yet on a deposit fee. Just talking the banks also do not like, for fear of unsettling their clientele.
The German bank about will not comment on whether they are already at wholesale Negative interest requires, but suggests that they also think about the future use of very high deposit. “For institutional clients with additional demand for deposit products the Bank offers various investment alternatives in order to respond to the changing interest rate environment,” said a spokesman.
As alternatives are offered for example, time deposits. But here it goes only to accounts with very high amounts. “The German bank currently has no plans to introduce fees for deposit in the general banking business,” it says
When it hits the average saver ?
private savers are still not directly affected. In Germany so far requires only the comparatively small Skatbank a negative interest rate of 0.25 percent for deposits on money market accounts – but only from a height of more than 500,000 euros. Current accounts include the amounts of more than two million euros less.
the de facto negative interest This is limited here to larger customers. Indirectly it can also already happen that small savers pay interest – if they have funds in their portfolio
Funds are held with major custodians and some of these. custodian banks charge for cash, so the money is not plugged in securities also been an interest. As a rule, however, only a small proportion of the fund’s assets is held in cash, the small negative interest rates have little effect on the performance of a Fund.
As long as the mass is spared?
Still stirring up from the lobby industry representatives. “We believe that negative interest rates on deposit accounts – whether for private or business customers – for a dangerous signal and unemployable,” says the German Savings Banks and Giro Association (DSGV)
It can not be the last that you are practically asking customers to stash higher cash holdings in their own homes. Other than that give the competition for retail customers actually no penalty interest here, as an association spokesman. However, he did not rule out that in the future also one of the more than 400 savings banks followed the example of Skatbank.
“The banks will try to avoid negative deposit rates “one common than staying at the Parole Association of German Cooperative Banks. Still cautious expresses it in the stock of private banks.
“Each institution has to deal with the issue,” was the co-head of Deutsche Bank Jürgen Fitschen, in his capacity as President of the Federal Association of German Banks (BdB) explains. But he was sure that all banks will deal “very responsibly” with the topic.
Will actually withdrawn money at negative interest rates?
Instead of interest credited to the depositors will then receive interest charges. Where he is already losing money today on most accounts. Although the amount remains the same, but the purchasing power dwindles. According to statistics of the Deutsche Bundesbank, the German
have hoarded currently 976 billion euros to reach daily accounts. The average interest rate is only still 0.29 percent, net of inflation amounting to 0.8 percent, the real interest rate is already at minus 0.51 percent. That is: The Germans go for their account-love already five billion euro purchasing power in lost
What can savers do now
Many investment strategists would welcome even if minus interest would be charged. “A minus interest will trigger a wow effect on savers. Then many will hopefully clear that it is not worthwhile to make more and more money lying around on savings accounts”, recently said Asoka Wöhrmann, the chief asset manager of Deutsche Bank, in an interview with the “Welt am Sonntag”. People should prefer to consume more and invest sensibly.
Sensible may be, the money market account more strongly on to pay the interest. There are still deals in which more than one percent, which is more than the inflation rate is paid. For example, the market leader ING Diba attracts new customers up to an amount of 100,000 euros with currently 1.25 per cent -. Guaranteed for four months
Basically, investors remain but little choice to take a higher risk. Just who has lying around amounts of more than 10,000 euros in accounts should consider whether it is not yet there is a part in which stocks and bonds. He puts his savings, although the risk of major fluctuations, however, can be combined with a broad diversification across asset classes limit the risk -. And mainly increasing the chance of nominal and real yields significantly
Balanced funds currently among the top sellers of the banks. When selecting caution. Convince Few of these products. Among the promising top sellers of Axa chance Invest (DE0009789453) and the FvS Multiple Opportunities include (LU0323578657)
Important:. Savers have the money at least may waive five years. For the emergency reserve in case the car or washing machine break down, continue to offer a demand deposit or checking account. But much more than two months’ salary should not be on.
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