Account remuneration through automated overnight deposits
There is a three-tier remuneration of accounts: tier 1 investment, tier 2 investment and excess balances.
Tier 1 investment
If the ECB interest rate on the deposit facility is negative, tier 1 remuneration will be the higher of Eonia less 10 basis points and the ECB deposit facility rate. If the interest rate on the deposit facility is equal to or above 0%, the remuneration rate will be the higher of Eonia less 10 basis points or 0%. In both cases, remuneration of the account is limited to a customer-specific maximum investment amount (tier 1 limit).
Tier 2 investment
We offer overnight deposits at selected credit institutions to further increase the average remuneration of our customers’ accounts. The Bundesbank acts in this context as an agent. The amount of this tier 2 investment is customer-specific. You have the option to set a maximum amount or to arrange for amounts below your tier 1 investment limit to be invested in the market. Tier 2 investments are remunerated at the actual average rate of interest on investments less a margin of 5 basis points. In the best interest of our customers, we naturally forgo an investment if the available market rate means that the investment is not economically efficient. We select only banks with a high credit rating as our counterparties.
If the deposit facility rate is negative, remuneration of any balances exceeding the tier 1 and tier 2 investment will be at the deposit facility rate less 15 basis points. If the deposit facility rate is equal to or above 0%, no interest will be paid on such account balances.
For more information, please refer to Product Annex Basic Services, section I, as well as Product Annex Investment Services, sections I and III.