Due to the costs of the zero interest rate policy of the European Central Bank (ECB), the Munich Savings Bank announces 28,000 premium savings contracts at the end of the year.
In addition, the largest Bavarian savings bank reserves the right to demand from 1 October on new customers with credits of more than 100,000 euros on giro or cash accounts penalty interest, said the municipal financial institution. With this announcement, the Sparkasse wants to prevent their deposits from growing too much.
Penalty interest increased
The Munich is not the first Bavarian savings bank, which is trying with drastic steps to mitigate the effects of the zero interest rate policy. A pioneer in Bavaria was the Nürnberger Sparkasse, which had terminated 21,000 premium contracts in July. These are savings contracts without a fixed term, which have reached the maximum interest rate after 15 years.
At the ECB, banks have been paying penalties for their deposits for a long time. On 12 September, the ECB raised this negative interest rate from 0.4 to 0.5 per cent. Savings banks, like Volksbanken and Raiffeisenbanken, mainly live on the interest rate spread between lower deposit rates and higher lending rates.
Because of the zero interest rate policy, this spread continues to shrink and lending rates are now so low that many banks struggle to meet their costs. Münchner Stadtsparkasse has 800,000 customers and claims to be the fifth largest in Germany.