Federal Court of Justice: Contractual clauses on negative interest rates for savings and call deposit accounts are invalid
In a landmark ruling on February 5, 2025 (Case Nos. XI ZR 61/23, XI ZR 65/23, XI ZR 161/23, XI ZR 183/23), the Federal Court of Justice (BGH) set out key requirements for the structuring of fee clauses in deposit agreements. The judges on the 11th Civil Senate found fault in particular with regulations of credit institutions that allowed so-called “custody fees” or negative interest rates to be levied on savings deposits or funds held in call money accounts. The BGH declared these clauses inadmissible and thus not legally binding.
Background and context of the decision
In recent years, numerous banks, faced with the prolonged low interest rate environment and the negative deposit rate introduced by the European Central Bank, were forced to adapt their financing models. In this context, customers of credit institutions were often confronted for the first time with negative interest rates being charged on traditional savings and call deposit products. To implement this, banks used standardized contractual terms in which custody fees were agreed. Consumer protection organizations viewed this practice as unlawful and took legal action against the use of such clauses.
Key statements of the decision
Invalidity of negative interest rates on demand deposits
The BGH made it clear that contractual clauses providing for an additional fee or a negative interest rate on traditional savings deposits or sight balances in call accounts are invalid. According to the court, the typical main contractual obligation of the bank for these products is the safekeeping and interest-bearing of the entrusted capital, for which—historically—only interest was ever to be paid to the saver. The converse, by which a fee (negative interest) would be charged solely for holding a balance, would undermine the legal framework set by statutory regulations.
Standard of transparency and control
As part of its decision, the court applied the standard of review set out in §§ 307 et seq. BGB. Accordingly, standard terms and conditions drafted by banks are subject to content control if they deviate from statutory default rules and disadvantage consumers. The BGH emphasized that the relevant price clauses “are incompatible with essential principles of statutory regulations” and therefore do not withstand content control. The contested clauses were classified as non-transparent and surprising because they deviated significantly from what is legally expected regarding savings deposits and did not provide a clear legal framework.
Distinction from other types of deposits
Professional or business deposit accounts, especially those with individually negotiated terms, are explicitly not affected by this decision. Nor did the BGH address other products, such as current accounts or business customer models, in which institutional depositors were charged negative interest rates based on individual agreements. The decisive factor for the current invalidity is always the standardized use of pre-formulated clauses in mass transactions with consumers.
Practical relevance and consequential effects
Effects on banks and clients
With this ruling, the discussion about permissible contractual structuring in banking gains particular relevance for retail customer portfolios. Banks must ensure that mass-market contract terms no longer contain any unilateral deviations from the statutory model. In particular, this provides consumers with legal certainty with regard to the conditions of classic investment products, which are granted heightened protection.
Significance for current and future contracts
The decision applies exclusively to clauses that are standardized and unilaterally stipulated. Individual agreements that are demonstrably negotiated must be assessed differently. As the ruling establishes fundamental standards, it is expected that many currently used contractual terms will need to be adjusted. Banks therefore face the challenge of thoroughly reviewing and, where necessary, modifying product information and contract documents.
Requirements for future contract structuring
Banks are required to observe the current BGH requirements when designing new financial products. Any attempt to alter the economic conditions for clients to their detriment through contractual clauses will in future be subject to the strictest content and transparency reviews. Even in an international context, courts and authorities will closely monitor compliance with consumer protection standard legislation.
Conclusion
With this ruling, the Federal Court of Justice has made an important contribution to transparency and consumer protection in banking law and has again clarified the fundamental principles of contract interpretation in mass transactions. At the same time, the decision highlights the need for carefully drafted contract documents and strict adherence to statutory requirements for retail banking products.
For companies, institutional investors or individuals dealing with issues regarding the validity of banking clauses or contract structuring in the financial sector, legal guidance from competent advisors can provide essential clarity. The lawyers at MTR Legal have extensive experience in handling complex banking and capital markets law matters and are available to assist with specific cases as needed.
