BGH ruling: Negative interest rates on savings accounts are not permitted – unprecedented!

On February 4, 2025, the Federal Court of Justice (BGH) ruled that negative interest on savings accounts violated the principle of good faith. This was the result of a lawsuit brought by consumer advice centers, which was successful on this point. However, negative interest rates on current account balances were declared to be generally permissible. In the past, banks had often used incomprehensible negative interest rate clauses in their contracts, which have now been declared invalid. However, the BGH did not decide whether customers who had paid negative interest rates had the right to a refund. Affected bank customers must take action themselves and file a lawsuit in order to receive repayment.

How tagesschau.de reported, the low interest rate phase in recent years has led to many banks charging negative interest rates. Consumer advocates had challenged this practice as illegal. The background is the policy of the European Central Bank (ECB), which wanted to stimulate the economy with low interest rates. Banks temporarily had to pay money for parking at the ECB, some of which was passed on to customers in the form of negative interest rates. In spring 2022, around 450 financial institutions in Germany charged such negative interest rates, with some charging these fees for balances of 5,000 euros or more.

Legal dispute over negative interest rates

The consumer advice centers criticized the contractual clauses used as illegal and unreasonably disadvantageous. The legal disputes also include judgments made by various higher regional courts. The Cologne Higher Regional Court had declared a clause from the Sparkasse KölnBonn to be ineffective because it was not transparent. Other higher regional courts, such as those in Düsseldorf, Dresden, Berlin and Frankfurt, sometimes considered similar clauses to be permissible. The Federal Court of Justice dealt with consumer advice centers' appeals to the rulings of these higher regional courts in order to clarify whether banks and savings banks can continue to charge negative interest rates.

At the moment there are no negative interest rates because the ECB has increased key interest rates. However, a return to the ECB's low interest rate policy could be possible in the future, and the Federal Association of Consumer Organizations is calling for a clear decision from the Federal Court of Justice on the legal situation. If the banks are defeated, there could be high claims for damages, which have the potential to place a significant burden on companies.