Danske Bank A/S, Denmark’s largest financial institution, announced on Friday that it will apply positive interest rates to certain retail client accounts. This decision comes as a response to increasing pressure from legislators and consumer advocacy groups, who have been urging banks to align with the recent surge in rates by Denmark’s central bank, Nationalbanken.
Earlier on Thursday, Nationalbanken had raised its benchmark interest rate, mirroring a similar move made by the European Central Bank. This shift is significant for Denmark’s banking industry, which has been grappling with negative interest rates since 2012 when the central bank became the first globally to implement such a policy.
Despite the central bank adjusting its benchmark rate upwards ten times over the past 14 months, many banks have been hesitant to fully increase their deposit rates above zero. This reluctance has attracted criticism from various quarters and even prompted some lawmakers to propose a new tax on banks as a punitive measure.
In an effort to alleviate this controversy, Danske Bank has stated it will offer an annual positive interest of 0.25% on transaction accounts. In addition, it will provide a 2.5% interest on children’s savings accounts. The Copenhagen-based bank disclosed these changes in a statement released on Friday.
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