A small co-operative bank in the Bavarian Alps is breaking a German taboo by charging wealthy clients to deposit their money following the ECB's shift to negative rates. As Ivor Bennett reports, Raiffeisenbank Gmund will apply a custody charge of 0.4 percent to some deposit accounts.
It's home to wealthy actors and sports stars but now the Bavarian town of Gmund am Tegernsee has a new claim to fame. It's the headquarters of the Co-operative Raiffeisenbank - the first in Germany to charge retail customers for deposits. (SOUNDBITE) (German) FULL-TIME BOARD MEMBER OF RAIFFEISENBANK AT TEGERNSEE, JOSEF PAUL, SAYING: "The ECB demands 0.4 percent negative interest from us, and we pass that on to our clients because at the end of the day he or she is responsible for the funds. It does not concern saving accounts or other types of investment, only cheque and instant access savings accounts." It's doesn't apply to accounts with less than 100,000 euros either. But even so… (SOUNDBITE) (German) FULL-TIME BOARD MEMBER OF RAIFFEISENBANK AT TEGERNSEE, JOSEF PAUL, SAYING: "We have informed our clients - the ones that are effected, which six weeks ago was about 140. And they understand - we've found other means of investment for them and very few have taken their money to a different bank." Several German banks have passed on the ECB's negative rate to large commercial customers. And one has applied them to deposits over 500,000 euros. A "solidarity contribution" is another lender's answer. But Raffeisenbank has broken a long held taboo which could make under the mattress an attractive alternative.