German bank charges customers for holding their money

[webfact]

German bank charges customers for holding their money

 

 

GMUND: -- A small co-operative bank in the picturesque town of Gmund in Bavaria is turning financial norms upside down. It’s decided to charge clients a fee for depositing money with them.

 

It applies to deposits of more than 100,000 euros held in current accounts. Local media reports suggest the total number of customers affected will be less than 150.

 

It’s the latest sign of the strain that the European Central Bank’s monetary policy is putting on the country’s financial system

Josef Paul who is a board member of Raiffeisenbank was clear the new policy was a reasonable one:

 

“The background is that funds in current accounts have to be available every day and we cannot use them to create investments.
The ECB demands 0.4 percent negative interest from us, and now we are going to pass that on to our clients . It does not concern saving accounts or other types of investment, only cheque accounts and instant access savings accounts.”

 

He want on to add, “It’s like a domino effect we are just passing on the costs that the ECBhas placed on us.”

 

The ECB, which sets interest rates for the eurozone, cut benchmark interest rates deeper into negative territory in March. Central banks in three other European countries — Switzerland, Sweden and Denmark — have also set negative rates. It did it to encourage banks not to hold on to cash and to lend in order to stimulate Europe’s economy. But with banks finding it difficult to get customers spending, the policy is now hitting the customer rather than the bank.

 

German banks are considering a variety of strategies in response to the low interest rate environment. These range from introducing fees for services previously offered for free, such as paper account statements, to keeping cash in vaults rather than parking it with the ECB.

 

-- © Copyright Euronews 2016-08-18

[otherstuff1957]

So, which country will be the first to introduce the combination of negative interest and a cashless economy?  Germany? Denmark? Sweden?  It will happen soon!

[Ralf61]

10 minutes ago, otherstuff1957 said:

So, which country will be the first to introduce the combination of negative interest and a cashless economy?  Germany? Denmark? Sweden?  It will happen soon!

 

Yes, a world of vouchers, coupons, and gift cards. No chance anymore for saving some money to ransom yourself from employers and landlords on one fine day, and, in a cash-free society, any move of anyone and anything is traceable

[MaxYakov]

13 minutes ago, Ralf61 said:

 

Yes, a world of vouchers, coupons, and gift cards. No chance anymore for saving some money to ransom yourself from employers and landlords on one fine day, and, in a cash-free society, any move of anyone and anything is traceable

 

One fine day beyond our expiration dates, I hope.

[worgeordie]

Can anyone explain to me,in simple terms, why interest rates are so low, and in this case non existent, it's seems the low rates are only helping 

people and countries that are in debt.

 

Anyone with savings are losing money day by day ,as the rates offered don't cover inflation, never mind what Governments say,people on the street know better.

 

When I arrived here nearly 30 years ago,I was getting up to 18% on 3 month fixed, still think of it as the good old days, then the bubble burst, rates dropping every month, so moved from cash into property, as it was the right time, so pleased I did, the way things are today, Cash is no longer King.

regards Worgeordie

[55Jay]

My grandfather, born in 1909, was a tough old bastard from the then wilds of British Columbia.  He moved to California and among other things, became a self-taught mason (concrete man) and built the several houses he and my grandmother lived in, by his own hand.  I remember the last one when I was young, he had a safe built right into the foundation of the house in the bedroom closet.  He kept their money in there, didn't have a bank account nor a kind word for any banker. 

[koolkarl]

Entire banking system is based on confidence only. Confidence goes, good bye bank.  With banks starting to charge depositors money and pay zero interest, if  the depositors withdraw all

funds, the bank will alter it's policy fast.  About 25 to 30 years ago, banks were only allowed to lend out $ 3 for every $ 1 in deposits.  US gov. and the rest of the bandits changed this rule back then; banks were allowed to leverage each dollar of deposit to whatever they liked.  Back then,

Switzerland was the last country to give in to this insane change.  In 2008, Switzerland had to bail out UBS.  And several other banks went under or required multi billions of taxpayer money to stay afloat. No one went to jail.  Zero interest rates are a result of many governments swimming in debt so they concoct stories like no inflation to brain wash the sheep. The grandfather of 55Jay above me was an astute man and has my respect. 

[elgordo38]

2 hours ago, worgeordie said:

Can anyone explain to me,in simple terms, why interest rates are so low,

and in this case non existent,it's seems the low rates are only helping 

people and countries that are in debt.

 

Anyone with savings are losing money day by day ,as the rates offered don't

cover inflation,never mind what Governments say,people on the street know

better.

 

When I arrived here nearly 30 years ago,I was getting up to 18% on 3 month fixed,

still think of it as the good old days,then the bubble burst,rates dropping every month,

so moved from cash into property,as it was the right time,so pleased I did,the way things

are today, Cash is no longer King.

regards Worgeordie

Worgeordie

The concept is that the central government and bankers want you to spend your money to boost the economy not save it. They are doing their damndest to protect fiat funny money currency and bury gold under the premise that it is an old outdated form of currency good only for a door stop. Gold has been around for 5,000 years fiat currencies have come and gone over the centuries. We are currently in a currency debasement cycle. The original dollar dating back to the origin of the Federal Reserve is now worth about 8 cents in real buying terms. The more Japan tries to knock their currency down the stronger it gets. People especially older ones that worked hard for their money are not buying into this spend don't save propaganda thus the sale of safes (not French) are on the rise. 

[Class C]

Quote

Can anyone explain to me,in simple terms, why interest rates are so low,

 

I can try.

Interest rates are the inverse of bond prices. It's like a seesaw, bond prices up = interest rates down or bond prices down = interest rates up.

Since the GFC in 2008 the central banks have been pumping lots of new money into the system. The mechanism how they do this (also called quantitative easing) is by buying bonds with new money. This pushes bond prices UP and interest rates DOWN. Their problem is that the market knows that they will do 'a lot of bond buying', so the market starts buying bonds too and soon enough more and more banks etc are buying bonds which keep going higher and higher pushing interest rates lower and lower. We now have the 'mother of all bond bubbles' and the lowest interest rates ever in recorded history.

Another problem is that with soooooo much money in the bond market, the rest of the global economy has insufficient resources and this is causing deflation which is exactly the opposite of the central bank intention. And the savers are utterly screwed which also adds to the deflationary bias. How will it end, no one really knows but it would be naive to think that everything is ok. It's far from ok. Exceptionally intelligent mathematicians, and there are a few in the world, don't think it will end well.   

 

The World is seeing ‘the greatest monetary policy experiment in history’ - Rothschild 

 

[ilostmypassword]

2 hours ago, elgordo38 said:

Worgeordie

The concept is that the central government and bankers want you to spend your money to boost the economy not save it. They are doing their damndest to protect fiat funny money currency and bury gold under the premise that it is an old outdated form of currency good only for a door stop. Gold has been around for 5,000 years fiat currencies have come and gone over the centuries. We are currently in a currency debasement cycle. The original dollar dating back to the origin of the Federal Reserve is now worth about 8 cents in real buying terms. The more Japan tries to knock their currency down the stronger it gets. People especially older ones that worked hard for their money are not buying into this spend don't save propaganda thus the sale of safes (not French) are on the rise. 

  It doesn't matter what each individual dollar is worth, it the total of how many you've got.  In other words it's all a matter of purchasing power. What would you rather have? 1 original dollar or 50 modern ones?  When I do the math, I find that 50 modern dollars have 4 times the purchasing power of 1 old one.  Gold is a "barbarous relic."

[swissbie]

6 hours ago, otherstuff1957 said:

So, which country will be the first to introduce the combination of negative interest and a cashless economy?  Germany? Denmark? Sweden?  It will happen soon!

Yeah, it's the perfect tool to rip the population of their savings and get rid of depts from states, banks and big conglomerations. Happy new world.

[soalbundy]

all i have in the bank back home is debt ( an agreed overdraft ) and that is what i will die with

[Asiantravel]

and now the banks also realise they are going to have a storage problem

 

https://mishtalk.com/2016/08/17/banks-ponder-vault-cash-in-response-to-negative-rates/

[rocketman777]

The Title:

"German bank charges customers for holding their money"

 

Is totally misleading. Once you deposit money into a commercial bank its ceases being "Your" Money.  It becomes the Banks Money that you have loaned it, and  a Liability on their balance sheet.

 

A commercial bank does not need this money in order to make loans. It creates the money for a loan by  simple book keeping entries.

Moreover, a Bank does not need a "Reserve Requirement" with Central Bank Reserves in order to make a Loan. Consequently by increasing a Banks  Reserves through QE has not lead to an significant increase in Bank leading. Bank leading depends solely on the mood of bank s regarding their overall economic outlook.

 

Secondly, the expectation that if you save money you should earn interest has become set in our collective conscience. The notion of "Don't work for Money let money work for you" has prevailed from the latter half of the 20th Century. However,  in pastimes in the Western Societies and still currently in Islamic societies the practice of Usury was forbidden  and for good reason.

 

Today virtual all money (approx 97%) is created by commercial banks as debt money. This has lead to a massive debt burden both on Governments , Households and Businesses. For example in the UK Based on June 2016 trends the daily interest repayment on UK personal debt is £144 million

 

What this means is that the few that have savings and expecting interest on these saving are sucking a huge amount of money on a daily basis from the majority of society.

 

There should be no expectation of earning interest from Savings.  If you choose a  Bank to keep money for you safely  then in return , particularly if they provide other services such as checking etc, charge a  fee. Banks, however, need to be regulated to prevent them from creating debt money. The power to create money must be taken back put into the hands of government (but NOT Politicians)

However, having said all this regarding savings the problem arises if there is  continuous or persistent inflation. No one wants to save money if it will loose its purchasing power over the years. As such savings would need to be invested rather then stored in  Banks or under the mattress and government needs to have zero inflation policies.

Currently  the BOE has a 2% inflation target which means your purchasing power of any savings will be halved in 35 years which is unacceptable  unless you can get a return on your money of 2% /yr.

 

And one final point on the  myth that if you had $1  in 1913 it would have a value of 8cents to days. May Only true if you put it under your mattress

In fact  $1 saved  with an average interest rate of 4.9%  (Av TBond Rate past 100 years)  would today have the value of $119.55!  Had you bought $1 of gold it would now be worth approx $65  !!

Edited August 18, 2016 by rocketman777

[Rod Gold]

Paper, be it cash, bonds, securities and so on, are all becoming suspect as the world slides slowly into a financial abyss.

 

Be smart and place at least some of your wealth in commodities that can not be devalued like paper.

 

Precious metals, real estate, antiques, art and so on will continue to hold their value as the world's financial giants become insolvent and the world as we now know it changes from paper to digital.   Even more suspect as a store of wealth.

[williamgeorgeallen]

8 hours ago, worgeordie said:

Can anyone explain to me,in simple terms, why interest rates are so low, and in this case non existent, it's seems the low rates are only helping 

people and countries that are in debt.

 

Anyone with savings are losing money day by day ,as the rates offered don't cover inflation, never mind what Governments say,people on the street know better.

 

When I arrived here nearly 30 years ago,I was getting up to 18% on 3 month fixed, still think of it as the good old days, then the bubble burst, rates dropping every month, so moved from cash into property, as it was the right time, so pleased I did, the way things are today, Cash is no longer King.

regards Worgeordie

low interest rates are a ploy used by governments to try to prop up sick economies. previously interest rates were set by the supply and demand for money. when the banks needed money to loan out they could offer higher rates to attract deposits. now with fractional lending banks dont need to attract deposits, they just get the money from a reserve bank.  many economies are so sick now that a mere suggestion of raising interest rates sends shock waves through share markets so it is unlikely we will see interest rates go up any time soon. it is a great time to be borrowing if you can find a stable realestate market with some capital growth. rental returns on my new zealand properties are about double the mortgage repayments.

[GOLDBUGGY]

The only word that comes to my mind is: "Ridiculous" 

 

Banks already charge you for every transaction you make as it is. Now they still want to do that and yet charge you to keep your money with them. 

 

Time to throw those ATM and Visa Cards in the drawer and go back to cash hidden under the bed.