Beginning in September, the first German bank, Raiffeisen Gmund am Tegernsee, will start charging some deposit holders a fee of .04% for monies they hold in accounts within their institution.
Back in June both the European Central Bank (ECB), and shortly after the German Bund, went into negative interest rates, meaning buyers of securities within these two entities would end up receiving less money when their securities reaches maturity.
And as negative interest rates continue to implode the European and Japanese bond markets to the tune of over $14 trillion, banks are now starting the process to charge their own retail customers for holding their money in these banks.
Earlier this week, Raiffeisen Gmund am Tegernsee, a German cooperative savings bank in the Bavarian village of Gmund am Tegernsee, with a population 5,767, finally gave in to the ECB's monetary repression, and announced it’ll start charging retail customers to hold their cash.
Starting September, for savings in excess of €100,000 euros, the community’s Raiffeisen bank will charge a 0.4% rate. That represents the first direct pass through of the current level of the ECB’s negative deposit rate on to retail depositors.
“With our business clients there’s been a negative rate for quite some time, so why should it be any different for private individuals with big balances?,” Josef Paul, a board member of the bank, told Bloomberg by phone on Thursday.
The good news is that “as it looks today, charges on deposits won’t be extended to customers with lower amounts” than 100,000 euros. However, that may (and likely will) change at any moment. - Zerohedge