Courtesy of Mish.
In response to the Bank of England setting interest rates at a record low 0.25% at its last meeting, the Royal Bank of Scotland sent out letters informing some large depositors that negative interest start on Monday.
Postbank, a subsidiary of Deutsche Bank, will charge depositors €3.9 per month starting November, in response to the ECB’s negative interest rate policy.
This is more money out the window for depositors. At the end of this article I have a roundup of banks offering negative interest rates on deposits.
RBS and Postbank Begin to Charge Customers for Deposits
El Economista reports RBS and Postbank Begin to Charge Customers for Deposits.
Royal Bank of Scotland (RBS), an entity in which the British Government controls a 72.6% stake, will begin charging its institutional customers for their deposits in the bank in order to cope with the last rate reduction interest held by the Bank of England (BoE) on August 4. In addition, two other German companies will do the same to cushion the negative rates implemented by the ECB.
According to the newspaper Financial Times, RBS has sent a letter to certain corporate customers of its investment banking division in which indicates that negative interest rates will apply from next Monday.
The negative interest rates affect customers operating in futures and options and therefore maintain deposits as collateral, said the British head a knowledgeable banker plans of the entity.
In the letter, RBS argues that so far have remained at 0% deposit rate, but the time has come where they can not “hold” this level, so begin applying negative interest rates.
Not the Only One
Also, the German bank Postbank, a subsidiary of Deutsche Bank, will charge €3.9 per month to customers to keep their current accounts in order to offset the negative interest rates of the European Central Bank (ECB), reports Reuters.
Ulster Bank, the Irish lender which is part of RBS, also imposes negative rates on large corporations, but does not apply such charges to small businesses or individual customers.
A few days ago German credit cooperative Raiffeisen announced it would begin applying negative rates on customer deposits in September. The policy applies to deposits in excess of 100,000 euros.
The cooperative imposes a negative rate of -0.4%, the same rate the European Central Bank charges for ‘excess’ reserves held at the ECB.
Postbank Scraps Free Accounts for Millions of Customers
Reuters reports Postbank Scraps Free Accounts for Millions of Customers.
Germany’s Postbank, a unit of Deutsche Bank, is to scrap free current accounts for millions of customers in an effort to offset the burden of the European Central Bank’s negative interest rates.
“The market environment, especially low interest rates, make it ever harder to earn money from current accounts,” Postbank board member Susanne Kloess said in a statement.
From Nov. 1 customers will be charged 3.90 euros ($4.41) a month unless they have monthly inflows of 3,000 euros or more, in which case they will still have cost-free access to a premium giro account, Postbank said.
A Postbank spokesman declined to specify how many customers would be required to pay for their accounts, but said it would be the “vast majority” of Postbank’s 5.3 million giro account holders.
More RBS Details
