What will negative interest rates bring? European banking giants charge deposits!

In the context of negative interest rates, some European banks are “squeezing” more revenue from depositors.

At present, a number of financial giants, including Spanish International Bank and Dutch International Group, are charging depositors’ deposits.

The practice of these banking giants suggests that at zero or negative interest rates, eurozone banks will pass on more costs to their customers, and while the strategy will accelerate the shift of depositors to “low-cost” banks with the opposite effect, it may help traditional banks sell more profitable products.

Among them, the Spanish International Bank will charge up to 20 euros a month for current accounts of customers who do not meet specific criteria after the New year, including whether they are payroll cards and whether they have bought their wealth management products.

Bilbao Biscaya, Spain, began charging non-wage card customers over 29 years of age with a 2 euro cashier service and 0.4 percent transfer fee.

ING charges a monthly fee of 10 euros for customers holding deposits of more than 30000 euros in their accounts, which can be waived if customers open payroll cards and earn more than 700 euros a month.

The group said in a statement that it was at an unusual time when interest rates were falling, while International Bank of Spain said only “loyal” customers would not be charged.

In addition to charging fees, many eurozone banks have lowered the threshold for deposits. Last year Deutsche Bank and Commerzbank lowered the threshold for new retail depositors to 100,000 euros.

At present, Europe’s five-year negative interest rate environment has brought great pressure on loans.

Notably, for digital banks such as Monzo、Revolut and N26, traditional bank charges on deposits may represent a huge opportunity. Because of the low cost structure, these digital banks can attract customers’ deposits by waiving service charges.

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