For members


INTERVIEW: How can consumers in Germany shield themselves from high energy prices?

The war in Ukraine is likely to worsen the already dramatic situation on energy markets. We asked a German expert how consumers can make smart choices to ensure that their utility costs stay under control.

INTERVIEW: How can consumers in Germany shield themselves from high energy prices?
A gas cooker. Experts advise people to use their gas and electricity efficiently. Photo: dpa | Marijan Murat

With prices rising across the board, people in Germany are getting less bang for their buck now than in previous years. This is particularly true of utility bills, which are being pushed up by the Ukraine crisis and string demand for natural gas in east Asia.

With utility companies struggling to deal with record prices on energy exchanges, some customers have been hit with the worst possible news this winter: they’ve had their contracts cancelled and have been pushed onto contracts with default suppliers.

READ ALSO: German government moves to end short-notice energy contract terminations

Given these unfortuitous circumstances, we thought it’d be useful to speak with Christina Wallraf, energy expert at the consumer rights centre in North Rhine-Westphalia.

Ms Wallraf, is it currently worth switching utility providers?

You should consider changing your electricity and gas providers at the moment if you have been informed of a significant increase in charges or if you have been pushed onto a contract with the default supplier.

Use price comparison websites to compare your current rate with the prices of alternative suppliers. In addition, keep the default supply tariff in mind. Default suppliers have to publish their prices on their website.

Customers who have not yet been given a price increase, or who have received only a moderate increase, will often be unable to find better offers on the market at the moment. They should stick with their current tariff.

What should one consider when looking for a new supplier?

Besides the price, it’s important to pay attention to the experience of other customers. Try to make sure that you find a provider that is as customer-friendly as possible.

The length of contract is also important. We recommend that you commit to a maximum of one year so that you can react flexibly to market changes.

The German government is planning to abolish its renewable energy surcharge in the summer or at the latest at the turn of the year. So you shouldn’t tie yourself down for too long. Or, choose a provider who will pass on the entire reduction in the surcharge to the consumer.

If you pick a tariff with a starter bonus, make sure to cancel it after one year, otherwise it will become very expensive.

How can our readers reduce their energy consumption wisely?

Identify electricity guzzlers in your home. These can be different in each household. Ask yourself: do I have a lot of home electronics, or older appliances like washing machines or refrigerators and freezers? If your water heating is electric, this also consumes a lot of electricity.

Be selective in using home entertainment systems. Big screens consume a lot of electricity. Devices on standby should be switched off completely, for example via a power strip.

Old appliances should be replaced, or at least used as energy-efficiently as possible: make sure your washer is full when you use it, use the ‘eco’ setting. Regulate you refrigerator to seven degrees Celsius. Each degree lower increases consumption by six percent.

In terms of water heating, don’t leave under-counter appliances on standby. It’s better to switch them off at night. Don’t set instantaneous water heaters to the highest level – you end up adding cold water at this level anyway because the water is too hot.

If you are a home owners, an old heating pump can also eat through electricity, so a new acquisition will pay off after a few years.

Save on heating bills energy by heating and ventilating your homes properly. Don’t adjust the setting on your radiators. One degree less in room temperature saves 6 percent on your heating bills. Only air out your home in quick bursts – avoid tilting the windows, otherwise the room will cool down and it increases the risk of you getting mold. 

Do you have any other smart tips for our readers?

If you are an home owner or landlord, you should invest in renewable energies. Heat pumps, photovoltaic systems, insulation – that’s the only way to reduce energy costs in the medium term.

READ MORE: How to change electricity and gas providers in Germany

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For members


Why German bank customers could soon pay less for their account

A major German bank is set to scrap fees on large balances - and a number of others look set to follow. Here's why people in Germany may be paying less for their savings or current account in the near future.

Why German bank customers could soon pay less for their account

What’s going on? 

Interest rates have been at rock-bottom levels for years, making it much harder for people to get returns on their savings.

In recent years, many banks have even been levying what’s known as negative interest rates on customers. If interest normally incentivises people to save by helping them to grow their money, negative interest basically does the opposite.

If you have a certain amount of money in the bank, your bank will charge you negative interest via a deposit holding fee, which will usually be a certain percentage of your balance.

With N26, for example, balances of over €50,000 are subject to a 0.5 percent fee each year. For a balance of exactly €50,000, that equates to €250 in bank charges just for keeping your money there. 

Some banks even charge a deposit holding fee for balances as low as €5,000 or €10,000 in a current account. 

On Tuesday, ING Deutschland became the first bank to announce that it would be scrapping negative interest rates for the vast majority of its customers.

From July 1st, new customers of ING will be able to deposit up to €500,000 in their account without being charged for it, while existing customers will automatically have the fee-free amount raised to €500,000 from the current €50,000. 

Now, it seems a number of other German banks are planning similar moves. 

Why is ING Deutschland ending the holding fee?

Not entirely out of the goodness of its own heart – though that doesn’t stop it being good news for customers.

The European Central Bank (ECB) is set to make a decision on interest rates in the bloc this July, and most people expect that the bank is poised to increase interest rates from minus 0.5 percent to zero. 

Since banks have basically been passing on the ECB’s fees to their own customers, a hike in the ECB’s interest rate would spell the end of most negative interest-rate accounts in any case. But ING Deutschland said it wanted to pass on the positive interest rate trend to its customers even earlier.

READ ALSO: EXPLAINED: How to save money on your taxes in Germany

“With the increase in the fee-free allowance for credit balances on the current and extra accounts, the deposit fee is no longer applicable for 99.9 percent of our customers,” said Nick Jue, chief executive officer of ING in Germany. “We were one of the last banks to introduce a deposit holding fee and one of the first to virtually abolish it.”

He added that the bank had already kept its promise to abolish the holding fee for almost all customers before the European Central Bank made its decision.

Does this have anything to do with that court decision on bank charges?

That’s definitely a factor. According to a decision in Germany’s Federal Supreme Court last year, credit institutions have to obtain the consent of their customers when making changes to their fees and conditions.

That means that financial institutions have to ask for consent to current fees retrospectively if they don’t want hoards of people trying to claim their money back.

If a customer doesn’t consent to the fees, the bank will usually close that customer’s account.

Man signs a contract

A man in a suit fills in an official form. Photo: picture alliance/dpa/Pixabay | hnw-Gruppe

According to ING Deutschland, the scrapping of negative interest rates on balances up to €500,000 may help to sway those customers who have not yet agreed to the latest terms and conditions – including the deposit holding fee.

Anyone who agrees to the Ts&Cs will automatically be given the higher allowance as of July 1st.

“ING Deutschland expects that the increase in the allowances will convince in particular those customers who have not yet agreed to the General Terms and Conditions including the holding fee, and that the bank will thus terminate fewer customers than last planned,” ING said in a press release. 


What other banks are planning to do this?

According to reports in Bild and Bialo, the other banks planning on ending negative interest rates (or raising the threshold for fee-free balances like ING Deutschland has done) include:

  • Deutsche Bank
  • Commerzbank
  • Deutsche Apotheker- und Ärztebank (Apobank)
  • Dortmunder Volksbank
  • Hamburger Sparkasse (Haspa
  • Frankfurter Sparkasse
  • Frankfurter Volksbank
  • Mittelbrandenburgische Sparkasse
  • Nassauische Sparkasse (Naspa)
  • Ostsächsische Sparkasse Dresden
  • Sparda-Bank München
  • Sparda-Bank Südwest
  • Sparda-Bank West
  • Sparkasse Hannover
  • Sparkasse Pforzheim Calw
  • Volksbank Stuttgart

What does this mean for my savings?

There’s good news and bad news.

The good news is that, from July, you’ll no longer have to pay exorbitant charges just to store your money in a safe place – and you won’t be penalised for saving more. The bad news, on the other hand, is that low interest rates aren’t going away anytime soon.

So while you won’t be losing money hand over fist, you won’t be earning much of a return on your savings either.

Banks in Frankfurt

Skyscrapers in the financial district of Frankfurt am Main. Photo: picture alliance/dpa/dpa-Zentralbild | Fernando Gutierrez-Juarez

“If the interest rate environment continues to develop positively, we will also let our customers participate in this development,” said ING Deutschland’s Nick Jue. “However, the low-interest phase will continue for the time being and broadly diversified investments will remain important.”

Getting a securities account where your money is invested is one way to try and grow your savings, as is investing in property.

Of course, people with mortgages and other loans benefit from the low interest rates – which could be why the German property market is currently booming. 

READ ALSO: Five ways Germany’s soaring inflation could affect your life