The thing with negative interest has turned. For a long time only very large deposits were affected, the whole thing had something abstract about it. A nuisance from the point of view of many, but one that only concerned the really rich, as it were. But at the latest since Commerzbank lowered the limit for negative interest rates for new customers to 50,000 euros and also addressed its existing customers, the phenomenon has reached normal savers. It has become the subject of many conversations with bank consultants, from which angry customers repeatedly report the most adventurous things: Pensioners over the age of 70 are recommended to take out pension insurance again to avoid negative interest rates.
Confident customers who refuse to sign a negative interest rate agreement are threatened with account termination.
The Stadtsparkasse Düsseldorf is often mentioned as a deterrent example, which has transferred deposits from savers in the amount of 2.43 million euros to the district court: the owners simply did not respond to the Sparkasse's request to sign an agreement on a custody fee.
"For the banks, not for the people"
Where is this going? When Mario Draghi, the former president of the European Central Bank, introduced negative interest rates on bank deposits at the central bank in 2014, he had said that these interest rates were "for the banks, not for the people". As if the banks felt provoked by this formulation, they gradually introduced regulations for their customers. The Internet portal Biallo has at least 460 institutes in Germany with negative interest rates, 410 of which also want negative interest rates from private customers. 150 banks have been added since the beginning of the year alone.
Many other institutes disguise the fact that they also take negative interest rates themselves, and speak of “confidential discussions” on the subject with “often insightful customers”.
In any case, negative interest rates have continued to spread even for private customers;
significantly stronger in Germany than in the euro zone as a whole, as ECB board member Isabel Schnabel recently emphasized.
The statements by bank executives that they want to keep the "breadth of private customer business" free from negative interest rates have become increasingly rare over the years.
“Deposit finishing” is one of the tricks
The way the banks describe their procedures internally and what they communicate to the outside world often differs in terms of language. “Deposit refinement” is a bank-internal term for the fact that an institute, by threatening negative interest rates, induces its customers to reallocate less profitable sight deposits into securities that can be used to earn more through commissions.
To the outside world, for example in their letters to customers, banks like to refer to the ECB, whose negative interest rate policy unfortunately makes it inevitable to also collect negative interest rates from customers.
Consumer advocates such as Niels Nauhauser from the Baden-Württemberg consumer center have shown on the basis of annual reports that banks often receive more negative interest than they pay themselves.
The whole thing is then a business: there can be no question of “passing on” costs that the banks themselves incur.
At the same time, the low interest rate phase makes business more difficult for banks overall, just as the consequences of digitization pose challenges that many are apparently responding to by constantly increasing fees and negative interest rates for private customers.
The mechanism: negotiation with threat
The banks have become smarter: In the early days, their regulations often offered points of attack for legal defensive measures by the consumer advice centers. Even now there are still lawsuits and ongoing proceedings. But they have become rarer and are less powerful. Above all, the decision of many banks to no longer introduce negative interest rates for existing customers through changes to the general terms and conditions, but through negotiations with customers, makes them legally less vulnerable. In order for bank customers to even get involved in such negotiations, the banks needed potential threats.
This is exactly what the Stadtsparkasse Düsseldorf provided them with with their rabid approach of first canceling the account of those who refused to accept them, then transferring the money to the local court and then pointing out that these deposits will go to the state treasury after 30 years. The message to unrelenting savings bank customers was not to be misunderstood: The introduction of negative interest rates is also going the hard way.