Liquidity Problems? Deutsche Bank Offers 5% Yields If Depositors Lock Up Their Money For Three Months
By Tyler Durden
One of the reasons why central banks around the globe have flooded the financial system with trillions in excess reserves is to make sure that banks no longer have to rely on potentially fleeting short term deposits (and is also why negative interest rates have become the norm in so many part of the world, that $10 trillion in bills and bonds now trade with a negative yield). As a result of years of such central bank policy, banks – mostly in Europe – no longer need to compete with each other for deposits: after all why offer tempting deposit rates in an age of NIRP when banks can get all the liquidity they need straight from the ECB and in some cases even get paid on it.
Furthermore, the whole point of NIRP is to slowly unleash negative, not positive, interest rates in order to discourage savings.
Which is why we were surprised to find that in a promotional offer by Europe’s biggest, and by many accounts most insolvent, bank, Germany’s Deutsche Bank is not only not rushing to penalize depositors, on the contrary it is offering its Belgian clients a 5% gross return for new €10,000 – €50,000 deposits if this money is locked up for the next three months. The offer is only valid for the next 40 days, until June 24.
Why the offer? All else equal it would appear as if Deutsche Bank suddenly needs liquidity quite urgently (but only enough per person so that in a worst case scenario the amount is fully insured by the government) with a 3 month lock up; so urgently it is willing to pay sn interest which is higher than on some European junk bonds.
It begs the question: how is it that DB can’t get a far, far cheaper deal in the bond market, or using short-term unsecured funds?
Here is Deutsche Bank’s offer to Belgian clients to open a DB Invest Plus account (google translated):
Open a term account and get 5% gross annual Deutsche Bank will always offer the best offer on the market. Therefore, you can now 3 months 5% gross annualized receive when you open a DB Invest Plus deposit account.
An excellent opportunity to increase your returns
Deutsche Bank, you may be demanding for money. Proof? Stop by one of our Financial Centers. You now get a clear 3 months 5% gross per annum for new amounts from 10,000 to 50,000 euros, if you go for June 24, 2016 opens a DB Invest Plus deposit account (subject to early closing).
Please note that this promotion is only valid for the injection of fresh money, ie amounts previously never been in an account with Deutsche Bank AG Branch Brussels were (between 10,000 and 50,000 euros per person and per family and only at the Financial Centers Deutsche Bank AG Branch Brussels. offer reserved for Belgian residents).
5% in all simplicity
You receive a guaranteed rate of 5% gross per annum …read more
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