Published: June 11, 2019
Due to the European Central Bank’s introduction of negative interest rates on all euro deposits globally, Euro Pacific Bank will be making two changes to fees and charges on EUR Bank Accounts, effective July 11, 2019:
- EUR bank account balances exceeding €100,000 will be charged negative interest
- EUR bank account maintenance and wire transfer fees will increase
Why?
As you know, Euro Pacific Bank maintains the utmost conservative banking policies by keeping your funds in “overnight deposits” at our correspondent banks, with zero lending or proprietary trading.
However, due to the ECB’s introduction of negative rates, our correspondent banks have been charging us negative interest on euro deposits for years, and to date, we have been absorbing this cost on our clients’ behalf. Unfortunately, to maintain these conservative banking policies and full-reserve status, we can no longer absorb this cost completely and have made the changes below to normalize our EUR fees.
1. Negative interest charge
We will begin charging 0.60% interest on all euro bank account balances exceeding €100,000 starting on July 11, 2019.
| Threshold | Negative Interest Rate (p.a.) |
|---|---|
| >€100,000 | -0.60% |
The negative interest will be calculated on the euro amount exceeding the threshold and debited from your account daily.1
What can I do to avoid this interest charge?
a. Lower your balance. You may keep your EUR Bank Account balance below €100,000, or as close to it as possible. Only the euros above €100,000 will incur an interest charge, e.g. on a €150,000 balance, interest is charged on €50,000
b. Convert your excess funds. You may convert your excess euros to any other currency. If you convert to USD, we will soon offer a Time Deposit paying 1% per annum on new USD funds, and converting your euros would be considered “new funds”. An official product announcement will be sent shortly.
c. Invest your excess funds. If you can tolerate some risk, you may utilize one of our numerous investment and trading products to diversify some of your euros into the markets, whether it’s in stocks, bonds, or precious metals.
Thank you for your understanding. We are continuously monitoring interest rates applied by the central banks, and if the negative interest rate environment changes, we aim to adjust our interest charges accordingly.
2. Account Maintenance & Wire Transfer Fees
To normalize our EUR fees & charges, EUR account maintenance and wire transfer fees will go up on July 11, 2019 to bring them in line with our other bank accounts.
1We previously stated that accrued interest is debited monthly. On October 21, 2020, we corrected this sentence to reflect that we are debiting interest daily. This correction does not impact the total amount of interest charged – just the frequency.