GERMANY - Banks Say Take Deposits Elsewhere

Arno Froese

Germany’s biggest lenders, Deutsche Bank AG and Commerzbank AG, have told new customers since last year to pay a 0.5% annual rate to keep large sums of money with them. The banks say they can no longer absorb the negative interest rates the European Central Bank charges them. The more customer deposits banks have, the more they have to park with the central bank.

That is creating an unusual incentive, where banks that usually want deposits as an inexpensive form of financing, are essentially telling customers to go away. Banks are even providing new online tools to help customers take their deposits elsewhere.

The pandemic has changed the equation. Savings rates skyrocketed with consumers at home. And huge relief programs from the ECB have flooded banks with excess deposits. Banks also have used the economic dislocation of the pandemic to make operational changes they have long resisted.

Alex Bierhaus, a managing director at a fintech company in Düsseldorf, received a letter from his bank, a unit of Commerzbank, last year saying it was going to start charging a 0.5% interest on deposits above €100,000, equivalent to $121,000.

To avoid paying, Mr. Bierhaus, whose savings ballooned without trips to restaurants and vacations, shifted some €60,000 to a bank in Italy and one in Sweden through an online platform called Raisin, which allows customers to shop for better rates at banks across Europe.

Banks in Germany are particularly hit by negative rates because Germans are big savers. About 30% of all household deposits in the eurozone are in Germany, according to the ECB. Last year, deposits in the country rose 6% to a record €2.55 trillion as people became wary of spending under the pandemic or simply had nowhere to spend, with restaurants closed and travel restricted.

-www.wsj.com, 1 March 2021

Arno's Commentary

The problem of having too much money is something many countries can only dream about. A contributing factor, the article states, is coronavirus. Thus, cash accumulates as never before; but, according to financial experts, this development could lead to a decline of Germany’s economy. Will it? No one really knows.

From a Biblical perspective, we know that not only in Germany, but also the whole world’s economy and financial system are built upon make-believe. Money is in reality worthless except for one’s faith in it, and that is what all people in the world have. What will be the end? Revelation 18:17 proclaims: “For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off.”

Arno Froese is the executive director of Midnight Call Ministries and editor-in-chief of the acclaimed prophetic magazines Midnight Call and News From Israel. He has authored a number of well-received books, and has sponsored many prophecy conferences in the U.S., Canada, and Israel. His extensive travels have contributed to his keen insight into Bible prophecy, as he sees it from an international perspective.

Read more from this author

ContactAbout UsPrivacy and Safety