In Europe, I work for a small/honest internet business. We make a fair profit every month, so we wanted to deposit our profits in different banks, until we decide what to do with the money.

To our surprise, all the banks we contacted were reluctant to open a bank deposit for us (even an interest free deposit). They say they would make a loss on every EUR we deposit!

They would only open an account for us if we plan to do many transactions on that account, where they would take a fee (e.g. bank transfers to pay salaries, etc). But we just want to deposit the money!

Why do EU banks lose money on every EUR customers deposit into their accounts, even if they don't pay interest to customers anymore?

  • This isn't the case in the USA. Must be a Europe specific issue.
    – minou
    Commented Aug 10, 2020 at 12:13
  • you know what @gaefan I really think that's changing. banks in the US are now starting to be fussy about what sort of transactions you'll be doing, particularly for biz. accounts (sadly)
    – Fattie
    Commented Aug 10, 2020 at 12:56
  • 2
    The European Central Bank offers negative interest rates, which means banks must pay to store cash reserves there, but which they are also legally obligated to keep. Low-risk investments like some government bonds are also negative. Banks can't give consumers negative interest rates for marketing reasons so the rates drop from 0.01% to 0.001%. But as a business client … you'll definitely pay negative interest directly or indirectly through transaction fees. This is politically desired: governments want you to invest the money, not hoard it.
    – amon
    Commented Aug 10, 2020 at 17:09
  • Theres a diffrerence beetwen opening an account and deposit. Deposit is worse than bonds. Because they don't generate profit. But to bank it's a financial liability as the worth of that deposit is calculated into amount the bank need to put into Banking Indemnity Fund. Why do that if that deposit don't generate money? Commented Sep 9, 2020 at 15:00

1 Answer 1


Why do EU banks lose money on every EUR customers deposit into their accounts, even if they don't pay interest to customers anymore?

Obviously, it costs billions to run a huge retail organization like a bank.

Why would they take accounts which generate no fees?

There's "no mystery" here.

(You may be thinking about the fact that deposits are "worth" something to banks; i.e. it increases their fractional reserve base. Banks deal in trillions, and, a tiny amount of currency means nothing. Small customers are a nuisance they don't want. Note that indeed, if you wish to deposit 10s of millions, they will take it.)

  • the marginal cost of adding another 100k€ deposit is zero for them, because we don't do transactions we never call them. It's just an extra entry in a database. Plus, they have a little hope that since we are clients, we could buy other services from them in the future. I suspect they have a NON ZERO MARGINAL COST, to even give up the hope of doing business with a new client that came in at zero cost.
    – elemolotiv
    Commented Aug 10, 2020 at 15:56
  • 3
    Unfortunately it's a case of, you or I may think that but it's just not how it works. (For example, just to get going, it costs a small fortune for banks/similar to sign up new users; and support costs are HUGE for users. {if you personally "never call", so what, on average non-fee accounts call plenty.}) The answer is (sadly) straightforward; your guess that non-fee accounts "cost nothing" - is simply wrong, unfortunately.
    – Fattie
    Commented Aug 10, 2020 at 16:12
  • 4
    Starting from 100.000 EUR, some banks begin to charge negative interest simply because the bank does not get rid of that money. Commented Aug 10, 2020 at 16:30

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