Negative Interest for Personal Customers
Help and guidance on negative interest for personal customers
We’ve made changes to our terms and conditions so that we may apply negative interest rates in the future, to the accounts of all personal customers who hold current and deposit accounts with us. These changes come into effect from 15 February 2022.
We currently apply negative interest to the accounts of personal customers that have combined balances of €3 million or more across their current and deposit accounts. When we apply negative interest we apply it to all balances. We may in the future apply negative interest to personal customers’ accounts with a combined balance of €1 million or more across their current and deposit accounts. If we do decide to do this or should the combined balance amount for negative interest application change, then we will write to personal customers impacted by this change.
If you’re a business customer you can visit our negative interest page for business customers here.
What is negative interest?
How have negative interest rates come about?
Since 2014, all banks in the EU have had to pay negative interest to their central bank. We’ve delayed introducing negative interest for as many of our customers for as a long as possible. However, European Central Bank negative interest, market conditions and the cost of providing current and deposit product services, now mean that some banks in the EU have had to introduce negative interest for their customers.
What are negative interest rates?
Negative interest applies to positive (credit) balances in a bank account. This means that there is an interest cost to keeping money in a bank account when balances are above a certain amount. This negative interest cost is separate to fees and charges associated with bank accounts.
For how long will interest rates be negative?
Interest rates on deposits have already been negative for much longer than expected. There are differing forecasts as to how long they will remain negative.
What are my other options?
There are alternatives to holding cash in accounts on which we apply negative interest rates. A review with a financial advisor can help you understand how you might invest money, plan for your retirement and protect your family income. This may help you to reduce negative interest rate costs but more importantly it can help protect you and your family’s finances.
We have a team of highly qualified and experienced financial advisors who can help you consider if these alternatives meet your needs. We can talk you through your long term financial objectives and help you plan to achieve them. We can do this remotely or in branch at a suitable time.
Negative interest rates Questions & Answers
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In the terms and conditions letter I received, you outlined that the changes to allow for negative interest affect personal customers (consumers). How do you define personal customers (consumers) and why are business customers not affected?
- A consumer, in this case, means any individual that has an account for personal use, not connected with their trade, profession or business.
- Business customers terms and conditions already allow for the application of negative interest.
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How do I know if negative interest is going to apply to my accounts?
- Currently we only apply negative interest to the accounts of personal customers with combined balances of €3 million or more across their current and deposit accounts. If your combined balances across your personal current and deposit accounts are €3 million or more and we have not already applied negative interest to your accounts, we will write to you with at least two months’ notice to tell you we are applying negative interest to your accounts.
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When will negative interest apply to personal customers’ accounts with combined balances of €1 million?
- We may in the future apply negative interest to personal customers’ accounts with combined balances of €1 million or more across their current and deposit accounts. If we do decide to do this or should the combined balance amount for negative interest application change, then we will write to personal customers to let them know what it means for them and provide at least two months’ notice.
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How do you calculate the €3 million combined balance across my accounts?
- Combined balance means the total of all euro credit balances across a customer's current and deposit accounts
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How much will negative interest cost?
- If we apply negative interest, we will calculate it daily and it is deducted on the first working day of the month. Negative interest rates are confirmed through our Relationship Manager engagements or in the notice letter we send to customers. The combined balance amount for negative interest application, currently €3 million, and the negative interest rate are variable and are subject to change.
- For illustration only: if a customer holds a constant balance across their accounts of €3 million over a period of 30 days and if the rate was -0.50%, this would mean that they will pay €1,232.88 in negative interest for that same period. As balances usually fluctuate throughout the month, the amount paid may differ to the amount illustrated.
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I have more questions on the Terms and Conditions changes you mentioned in the letter I received.
- To find out more about these changes click here.
Talk to us
If you have further questions or want to discuss this with a member of our team you can contact us by
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