ING Germany is the first major bank to bring back overnight interest rates of 1 percent for new customers. The overnight interest rates would remain, according to the head of the bank. “We think that the era of zero interest rates is now over.”
The direct bank ING goes back to catching customers with rising interest rates on savings. “We will be the first major bank in Germany to bring back overnight interest rates for everyone,” announced ING Germany boss Nick Jue on Thursday in Frankfurt. New customers would get an overnight interest rate of 1.0 percent per year for four months. Average overnight interest rates are currently 0.3 percent, according to the consumer portal “biallo.de”. From December 6, the bank will pay all customers 0.3 percent on overnight money – “without conditions”.
This is just the beginning, emphasized Jue: “Our overnight interest rates have come to stay.” The bank passes on part of its profit from the rising interest rates to customers. “We think the era of zero interest rates is over now,” Jue said.
For years, the direct bank had lured customers under the name ING-Diba with relatively high interest rates on savings. But deposits cost the institute money in the low interest rates of recent years. For this reason, the Management Board increasingly relies on house bank customers who not only park money at ING, but also generate income through construction financing, consumer loans or securities savings.
The move towards higher interest rates initiated by the European Central Bank (ECB) this summer is now causing the industry to change course again. Many institutes have abolished negative interest rates for private customers and are groping their way up in interest rates on savings. On the other hand, construction financing, for example, is becoming more expensive.
“I see our savings going up every month since May,” Jue said. And the ING Germany boss wants to attract new customers with special conditions for overnight money. At the end of last year, the institute had almost 9.1 million private customers.
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