The Limited Times

Now you can see non-English news...

Because of ECB interest rate policy: Sparkasse Munich announces thousands of savings contracts

2019-09-26T13:49:37.283Z


It's getting harder and harder to invest money at an interest rate - even for banks. Now, the Munich savings bank announces nearly 30,000 premium savings contracts. The reason is the interest rate policy of the ECB.



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.

Source: spiegel

All business articles on 2019-09-26

You may like

News/Politics 2024-03-25T05:15:18.279Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.