Penalty interest rates for private customers
Penalty interest for private customers
The dam is broken. The hitherto unthinkable is thus becoming more and more probable. First banks charge penalty interest on retail deposits. Skatbank has made a start and other banks could follow suit.
The German Skatbank from Thuringia is a branch of the VR bank Altenburger country EEC. Since last Saturday, it has been charging a penalty interest rate of 0.25 percent on large sums in call money accounts and normal current accounts from its private customers. This has broken a taboo. And according to the estimates of financial experts, other financial institutions could quickly follow this example, even if the Raiffeisen and Volksbank Association BVR and the Savings Bank Association DSGV speak of an isolated case that should not set a precedent.
Since June, the ECB has been charging penalty interest of 0.10 percent to banks that prefer to park their money with it instead of passing it on to the economy in the form of favorable loans. Since this affects all banks, it is safe to assume that more banks will pass on these negative interest rates to their customers in the future.
The penalty interest with the Skatbank is for it only the test balloon. This is to see how far they can go without customers leaving in droves.
Still however only very few customers are concerned by the punitive interest rates. At Skatbank only customers who have more than 500.000 euros in their overnight deposit account or more than 2 million euros. Euro on their current account. In the Free State of Thuringia, this should certainly be a very manageable number of private customers.
But in the future, both the credit limits could be lowered and the number of banks that debit credit balances could increase. Some corporate customers have already had to pay penalty interest on their credit balances at various banks for a few weeks now. This development will now also increasingly affect private customers.
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Savers must become active
Private savers in Germany should therefore slowly get used to the idea that not only are they hardly getting any interest for their money any more, but that hoarding money reserves may soon also incur costs.
Therefore one should concern oneself already today with alternatives. Shares, gold or fixed-interest securities can be quite attractive. But also the investment in real estates should be considered, if also here the market begins in places already to overheat.
Who puts aside his money for later, so that with age the standard of living can be maintained to some extent despite sinking pensions, which must worry. Zero interest rates, inflation and penalty interest rates will otherwise inevitably eat up cash reserves.