Minister of Trade and Industry Simon Kollerup (S) now believes that the limit has been reached and urges the banks not to lower it further.
But what is the explanation for the fact that it is at all an option to have to pay to have money standing in the bank? Read more here:
* The interest rate on the bank account is partly governed by what the interest rate is at Danmarks Nationalbank, which is the banks’ bank. In the end, however, it is the individual bank that determines the interest rate on the bank account.
* The interest rate is minus 0.60 per cent at Danmarks Nationalbank – close to the lowest ever – and this means that it costs ordinary banks to have their money – which comes from private customers and corporate savings – standing at Danmarks Nationalbank.
* Danmarks Nationalbank’s interest rates are again partly governed by the interest rates of the European Central Bank (ECB), which is the central bank for euro area countries.
* Denmark has a fixed exchange rate policy for the krone in relation to the euro, which must be in a range between 729 and 763 kroner for 100 euros. To live up to the policy, Danmarks Nationalbank needs to be close to the ECB’s interest rates.
If the interest rate at Danmarks Nationalbank, for example, is significantly higher than at the ECB, it will be more attractive to buy Danish kroner instead of euros, and this will mean that the krone will rise in exchange rate and risk getting out of that range.
* The interest rate has been at zero percent or negative at the ECB since 2012, and the picture has been roughly the same at Danmarks Nationalbank.
* The reason why the ECB has introduced negative interest rates at all is that the bank aims to ensure current inflation of two percent in the eurozone and support the economy.
Following the financial crisis, the ECB has continuously lowered interest rates to send inflation up and kick-start growth. The negative interest rates must encourage banks to lend more, which in turn will create growth in the economy.
* Since 2016, corporate customers in many Danish banks have paid negative interest on savings, while private customers have been kept free.
* In 2019, Jyske Bank was the first major bank to introduce negative interest rates on private customers’ savings. Since then, most of the banking sector has followed suit. In most banks, you must have up to 100,000-250,000 kroner standing before you have to pay a negative interest rate.
Sources: Danmarks Nationalbank, Jyske Bank, Ritzau.