Not good news for savers. At ING, customers will have to pay penalty interest much faster in the future if they store (too) much money on their current or overnight money. The allowance will soon be halved without further ado.
It will soon pay off much faster if you want to avoid penalty interest.
Difficult times are ahead for German savers. Because more and more banks are resorting to drastic measures to get their own costs under control. For example, with penalty interest on the credit. What once only concerned commercial customers is increasingly the rule for private customers as well. For example, Berliner Sparkasse and Hamburger Volksbank charge negative interest from a certain amount of credit on the current or overnight account. This has also been the case at Postbank since the beginning of June. Now ING Germany, which is popular in this country, is once again increasing the pressure on savers.
ING: PENALTY INTEREST FOR NEW AND EXISTING CUSTOMERS
On Monday, ING Germany announced at the Group’s headquarters in Frankfurt am Main that it would adjust its list of prices and services as of July 6, 2021. In plain language, this means that from November 1st, new ING customers will incur penalty interest of 0.5 percent per year on all current and overnight money accounts opened from July 6th. Specifically when they hoard more than 50,000 euros in their current or overnight money account. So far, the limit was 100,000 euros. Existing customers will also have to expect corresponding additional fees in the form of a custody fee from November 1, 2021. For example, if you have 75,000 euros in your account, including the tax exemption, you have to pay 125 euros in interest, with 100,000 euros in credit it would be 250 euros.
Existing customers who have more than 50,000 euros on their current or extra account will be contacted by ING from July and informing them of the upcoming custody fee. The bank is not allowed to simply introduce the penalty interest for existing customers, but whoever does not agree to the new custody fee after being informed in writing is likely to receive a termination from ING sooner or later . According to the financial institution, around eight percent of the 9.5 million customers currently have amounts of more than 50,000 euros in their accounts. The equivalent of around 760,000 customers are directly affected by the new custody fee. You have to be prepared now to be informed about the new negative interest rate as soon as possible.
BANKS PASS ON ECB FEES TO CUSTOMERS
Nick Jue, CEO of ING in Germany, said on Monday in Frankfurt: “We didn’t make this decision easy for ourselves.” After all, in recent years it has grown into one of the largest and most popular banks in Germany. “So far we have largely been able to offset the costs that arise from falling interest margins and the negative deposit interest rate from the ECB with our existing product portfolio. However, the deposits continue to rise, also because many competitors have already introduced a custody fee for private customers. “
Background: Commercial banks like ING currently have to pay 0.5 percent interest if they park unneeded money with the European Central Bank (ECB). More and more banks are passing these costs on to their customers when a certain amount is stored in their accounts. More and more frequently, the tax exemption is 25,000 euros on current accounts and 50,000 euros on overnight money accounts. Sometimes, however, also significantly below.
TIP: TRADE STOCKS AND ETFS
The ING board of directors advises affected customers to invest any money they do not need in stocks or ETF savings plans instead of storing it in a current or overnight account. “In the current interest and inflation environment, there are good opportunities with securities to invest money in a broadly diversified, long-term and inexpensive manner. That is why we said: We will make saving securities as easy as saving overnight money – that is, flexible and without purchase fees, ”Jue continued. ETF savings plans have not cost any purchase fees at ING since April.
So-called neo brokers such as Trade Republic or Just Trade have also been popular in Germany for a few months. There it is possible to trade stocks at low cost via a smartphone app or to invest in ETFs. Here at inside digital you will find a comparison of the most famous neo brokers . But be careful: Here, too, there is a risk of penalty interest if money is not invested for too long, but only parked.
