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What retail investors can do when interest rates are negative

2020-08-12T02:37:10.234Z


Customers who have small savings in their accounts are also increasingly affected by negative interest rates. However, those who are affected have good alternatives.


Customers who have small savings in their accounts are also increasingly affected by negative interest rates. However, those who are affected have good alternatives.

Frankfurt (dpa / tmn) - More and more banks are introducing negative interest rates for overnight money and current accounts. Even for customers who do not have millions on their hands.

For a long time, banks and savings banks only passed negative interest rates on to corporate customers and particularly wealthy private customers. The banks and savings banks have to pay 0.5 percent interest for excess money that they park at the European Central Bank (ECB).

Affected customers should deal with alternative investment options or even with a change of account, advises Max Herbst from FMH financial advice in an interview with the dpa topic service.

Why are more and more banks introducing minus interest on smaller amounts?

Max Herbst: Negative interest rates are an instrument that banks consciously use to deter customers from parking too much money in short-term investments for which bankers will sooner or later have to pay penalty interest to the ECB.

The banks that started it said at the beginning that only customers with very high investment sums would have to pay penalty interest. Then you noticed: the customers swallow it, the customers stay with the bank anyway. And then the amounts from which penalty interest is charged became smaller and smaller.

The common man, who has always had his account with his bank or savings bank and has 25,000 euros in a call money account, does not necessarily change banks - even if his house bank now charges him half a percent penalty interest.

It is also often forgotten that the ECB has given the banks extremely large allowances. The banks could use this exemption limit to leave the retail investor unscathed. But the mass of small customers brings more than the large customer, who could also be lost.

Which accounts are actually affected?

Herbst: We are talking about the overnight money account and we are talking about the current account. There are a number of banks that charge penalty interest on the overnight money from the first euro. In a few banks, the lower limit on the checking account is already or only 5000 euros, which shows that you don't want to scare off checking customers so quickly. However, if the bank demands negative interest, it must notify them in good time.

What tips do you have for private investors?

Herbst: The first question is: Do I have to have that much money lying around in the overnight or current account? Let's take an amount of 50,000 euros. What is the likelihood that I will need all of the money right now? Could you perhaps invest 40,000 euros in a fixed-term deposit account with 0.2 percent and more at the same or a different bank for a year? Then I transferred this money from account A to account B and instead of minus interest I get credit interest.

Then you have earned interest at the end of the year and after a year you decide again how to distribute the savings. There are enough opportunities to find out more. And opening a new account takes half an hour.

© dpa-infocom, dpa: 200811-99-128203 / 5

FMH at negative interest

Source: merkur

All life articles on 2020-08-12

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