• March 2, 2023

Savings bank may not cancel high-interest contracts

Savings bank may not cancel high-interest contracts

The euro and financial crises have led to the European Central Bank (ECB) pushing interest rates ever lower. It was hoped that more cheap money would stimulate the economy and ward off the threat of deflation. There is now money in abundance, at least for the banks, which supply themselves directly with new money from the ECB, but do not pass it on to the economy in the desired style. For savers, however, times are anything but rosy. They are desperately looking for high-yield investment opportunities.

Because of the low interest rates, not only small private savers are getting into trouble, but also institutional players such as insurance companies. They invest their customers’ money primarily in safe bonds. But the pension funds hardly throw off any more yields. It is better to keep your hands off classic bond funds at the moment. The guaranteed interest on life insurances had to be lowered therefore again and again and so some age precaution might already have got into difficulties.

Old contracts with high interest rates

Also banks and savings banks have to fight with the low interest rates, store nevertheless still numerous contracts in their vaults, in which they gave their customers high interest promises. So savings contracts were not uncommon 10 years ago, which promised customers significant bonus interest rates. Savers, who have such contracts in the bag, are today naturally fine raus.

Between 1993 and 2005, Sparkasse Ulm also sold high-interest savings contracts with a term of 25 years to its own customers. This includes the guarantee of up to 3.5 percent bonus interest. While this was a good deal for the savings bank at the time, today it wants to get rid of such contracts as quickly as possible. Understandable from the bank’s point of view, interest rates of 3.5 percent are very difficult to earn nowadays.
To make matters worse, customers who used to pay as little as 50 euros a month into the contract now have their transfers capped at 2.500 EUR per month extra.

That’s why the Sparkasse Ulm declared without further ado that it could no longer justify these savings contracts. Customers were offered the opportunity to switch to other contracts. Some accepted the offer, others were understandably pissed off and insisted on the agreed term. About 4.000 of the once 21.000 sold “Scala”-contracts were therefore disputed, and this dispute came to court.

The regional court Ulm clarified that the savings bank Ulm may not terminate the savings contracts because of the meanwhile clearly lower interest level. The legal provisions governing the loan agreement are also quite clear in this regard. In addition, the Regional Court forbade the Sparkasse Ulm to freeze the amount of monthly savings installments. Customers may increase their savings rate at any time to 2.Raise 500 euros or lower to 25 euros. This is what the sales prospectus said. And this continues to apply just as much as the term.

The false image of the savings banks

This example shows once again that you as a bank customer must pay very close attention, so that the financial houses do not pull you over the table. In case of doubt, you should always let a court clarify disputed issues.
And this case shows something else very clearly. Savings banks are not one whit better than large international banking groups. Savings banks also always look first at their own returns. And as long as they earn well from their customers, they maintain their image of being honest and down-to-earth. If one’s own return is at risk, then the kid gloves are quickly discarded.