Retail customers can expect charges from many German savings banks and institutions of finance just for holding their money in the aftermath of an announcement from the CEO of Deutsche Bank, John Cryan. Cryan stated what many interpret to be an early warning sign of monetary repression across Europe. It isn’t spelled out any clearer than “fatal consequences” for savers, to use his terms exactly.
German cooperative savings bank, Raiffeneisen Gmund am Tegernsee, located in a small Bavarian village was the first to make the announcement to customers that merely holding their cash will come at a charge. Consequently, home safes are rising as a popular alternative to risky savings accounts at negative interest rates. German savers seem to be wasting no time to put their savings in something more secure than grandma’s shoebox and not as risky as the bank.
As interest-rates plunge to abysmally negative depths, Germans are the first to follow in the footsteps blazed by the Japanese just over a year ago. Japanese consumers started stashing their cash at home upon the introduction of negative interest rates there.
Following the wisdom of basic mathematics, which proves zero is greater in value than a negative, home safes are looking more attractive than negative interest rates with additional charges for the mere safekeeping of cash — taxes added.
Cue a 25 per cent spike in safe sales from the largest safe manufacturer in Burg-Waechter KG. Increases are pushing manufacturers to limit. There are now waiting lists for safe-deposit boxes in many of Germany’s metropolises. And it’s not your average cast of tin-foil hat wearing conspiracy theorists acting contrary to the European Central Bank’s policies, but the banks themselves.
It is reported that financial institutions such as the retail, savings and other investment banks are hoarding more cash along with some gold bars in preparation for an unclear economic future. The fallout of bankers announcing negative interest rates shows no end in near sight, and those with their eyes to the horizon are noting the benefits of stocking their savings in a place more secure than under their mattresses.
Some are opting to keep it in a safe-deposit box at the bank for extra security, but fees for this service can be avoided by investing in a quality home safe. Paying to save at a retail bank is nothing less than ridiculous according to one Munich-based entrepreneur. Many citizens echoed his sentiments when asked about the new bank charges for holding savings.
In contrast to an array of European and North American nations where credit cards are often taken for granted as another form of cash, regardless of a negative balance, Germans are adhering to the old tried and true adage of their elders that, “Only cash is real.”
And they seem to mean it, at almost a 2:1 ratio of cash transactions comprising 80 per cent compared to U.S citizens.
Maybe we can learn from their foresight.