Breaking a taboo: Raiffeisenbank introduces penalty interest rates

Now it also hits private customers. Bavarian bank introduces negative interest on savings balances.

It was only a matter of time before the first bank keels over and passes on the consequences of the ECB's low-interest policy to its own customers. The Raiffeisenbank Gmund (at the Tegernsee in Bavaria) makes the beginning and charges negative interest in the future. Thus the taboo is broken and imitators in form of other banks will surely find themselves fast.

Negative interest

From September 2023, customers of Raiffeisenbank Gmund must pay negative interest on their savings deposits. 0.4 percent interest is then charged on deposits in current and call money accounts. The cooperative bank does not call this interest officially however punitive or negative interest, but calls it “Verwahr-Entgelt”.
This is of course marketing-speak and does not make the matter any better. To charge money for the fact that the bank keeps an electronic account in credit is already brazen. The costs for the required computer systems should actually be loosely covered by the account management fees. To charge extra now is a rip-off.

The fact that the bank itself has to pay 0.4 percent penalty interest to the ECB cannot be an argument for the now introduced penalty interest for private customers. That belongs to the risk of the bank. If it is so stupid not to pass on the cheap money of the ECB to borrowers at favorable conditions, but to park the money at ECB, then it should pay for this stupidity also itself. To charge even the own customers for it, is customer-hostile and should also be classified so by all bank customers.

Euro small change

Fortunately, not all customers of Raiffeisenbank Gmund will have to pay the announced penalty interest in the future. For deposits up to 100.000 euros no “custody fee” is charged. Thus probably the majority of the customers remains spared, at least for the time being.

If, however, the ECB continues to adhere to its monetary policy course, then even savers with smaller assets will probably be asked to pay up. The banks and savings banks are moaning because of considerable costs that the ECB's interest rate policy is said to have prepared for them. But only very few ask their customers to pay for it. Only the German Skatbank from Thuringia loads so far large deposits over 500.000 €. According to statement of the savings bank federation DSGV and the Bavarian federation of cooperatives however no other bank plans an introduction of such penalty interest.

It lies therefore probably nevertheless to a large extent at the guidance of the Raiffeisenbank Gmund even, if one comes into the Trudeln and must generate therefore more incomes.