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And this is news why exactly ? Negative rates have been around since 2014. And this "trick" of opening multiple bank accounts has been exploited across the EU

And this is news why exactly ? Negative rates have been around since 2014. And this "trick" of opening multiple bank accounts has been exploited across the EU for pretty much the same period of time. For example, I've frequently done business with German companies. They don't even hide it. It is not in the slightest bit uncommon to receive an invoice with four or five EUR bank accounts printed on it. You can randomly pick your "preferred" account to pay to and the company's accountant will rebalance the accounts at the end of the quarter (or wahtever).

luckylion 5y ago
Having multiple bank accounts isn't usually a thing to avoid negative interests in Germany. It's that payments between banks took three days to settle (I think they're down to 1 day now), while payments between accounts at the same bank usually settled immediately. It's much easier to have multiple accounts with the largest banks so most of your customers can use bank-internal transfers. Also, it's usually a good idea to have a backup just in case something goes wrong with your primary bank account. Dealing with bureaucracy is bad enough, dealing with it while you're also unable to send or receive payments is way worse.
- traceroute66 5y ago
  > It's that payments between banks took three days to settle (I think they're down to 1 day now) Isn't Germany subject to SEPA time constraints like everyone else ?
  - ascar 5y ago
    SEPA is more relaxed than you might think. N26 has a nice explanation [1]: > ...[A]ll standard SEPA transfers should arrive within a maximum of 2 working days. Keep in mind that if a transfer is made just before a weekend or holiday, the time frame will be extended to a maximum of 3 working days. > You’ve probably heard that all SEPA transfers have to be completed within one “banking day,” so let’s clarify what that means—one banking day is equivalent to two working days due to the opening hours of the banks involved. Any weekday that is not a holiday is considered a working day. [1] https://support.n26.com/en-eu/payments-transfers-and-withdrawals/transfers/how-long-do-transfers-take https://support.n26.com/en-eu/payments-transfers-and-withdra...
    - sneak 5y ago
      If I'm reading this right, this is a theoretical maximum of five calendar days, if you send eg on a late night before a holiday weekend?
      - deleted 5y ago
        [deleted]
- tluyben2 5y ago
  Jikes, I am kind of used to swift transfers taking 1 day these days, let alone sepa, that should be max minutes. And I have not seen them take more for quite a while. Did not know it was that different in DE.
  - xioxox 5y ago
    It's not great in DE for bank transfers. Either the account does not support sending SEPA instant or it's quite a large charge. Often savings accounts don't seem to be acceptable as destination accounts for SEPA instant.
  - maverwa 5y ago
    AFAIK they have a limit of "at most one working day" since a few years ago. Which, in case of weekends, may still be several days. Because computers dont work on weekends!
blueblisters 5y ago
> It is not in the slightest bit uncommon to receive an invoice with four or five EUR bank accounts printed on it. You can randomly pick your "preferred" account to pay to and the company's accountant will rebalance the accounts at the end of the quarter (or wahtever). Why ask the customer to pick? Why not generate invoices with a randomly picked bank account (which can also lend itself to automatic rebalancing)?
- traceroute66 5y ago
  > Why ask the customer to pick? Why not generate invoices with a randomly picked bank account (which can also lend itself to automatic rebalancing)? Maybe its just my perspective having (mostly) dealt with SME's. I would guess larger companies are more clever about it (e.g. perhaps they have one "receipt" account and then the money gets automatically spread out from there once received).
- deleted 5y ago
  [deleted]
- sokoloff 5y ago
  If you send a different bank account every month to many companies, it’s going to get flagged by fraud checks in a lot of ERP/AP systems. (We have vendor records, including the payment bank account number. If your invoice matches and passes internal checks [we received the goods, we have money in the cost center, address/account numbers match, etc], it gets smoothly paid as agreed. If you rotate bank account numbers, it’s going to be kicked out to be manually checked and you’re going to get paid late.) You could load-balance once per-customer and not trip this, but that doesn’t get you fully automatic rebalancing.
  - mikeryan 5y ago
    Also smaller less sophisticated vendors (I include my company in this) simply enter your remittance information once in their banking system on the first invoice. We aren't going to want to update it every time. They could have it randomize per vendor I suppose but all that is a lot of hassle when you can just put five accounts in the Payment Advice field in your accounting software and let the vendors do with it as they choose.
darkerside 5y ago
People do the same thing in the US to take advantage of FDIC insurance, which only goes up to $250,000. Not terribly novel.
- petercooper 5y ago
  UK business here.. we do the same because the UK equivalent guarantees bank accounts (even for businesses) at £85,000 (~$120,000) each. I have no idea what businesses with huge cash reserves do as you can quickly run out of banks.
  - jonasdegendt 5y ago
    They put the money in short term treasuries, I reckon. Money market funds come to mind as well.
  - joshfraser 5y ago
    you can have multiple accounts at the same bank. some banks like HSBC will take care of splitting it up for you behind the scenes.
    - joosters 5y ago
      The UK bank cover is per-bank, not per-account.
      - jfk13 5y ago
        Also worth noting that when a bank operates under multiple names, such as First Direct (part of HSBC) or Cahoot (a division of Santander), the cover applies to your total balance across all accounts, regardless of the name. So it's worth knowing which "banks" are really just different different brands of the same parent institution, if you're trying to diversify because of this limit.
    - bazzargh 5y ago
      No - your £85k guarantee is across all your accounts with that bank (even across the same group of banks). Straight from the source: https://www.fscs.org.uk/what-we-cover/banks-building-societies/ https://www.fscs.org.uk/what-we-cover/banks-building-societi... _If you have money in multiple accounts with banks that are part of the same banking group (and share a banking licence) we have to treat them as one bank. This means that our compensation limit applies to the total amount you hold across all these accounts, not to each separate account._
DocTomoe 5y ago
Historically, multiple bank accounts at different banks in Germany were a way to speed up payments, in a time when wire transfers were dependent on local distance and different banking networks which exchanged wire transfer data on magnet tape in central bank parking garages (and thus were called "Garagenverfahren"). Which ended not too long ago, IIRC in 2006... If you wanted the invoice to lead to cashflow quickly, you asked the customer to pay to an account that would speed up payment.
lbarrow 5y ago
Why would they try to hide this? It seems perfectly reasonable to do.
- Cthulhu_ 5y ago
  And legal; it's not like they're hiding their assets. It's a workaround from what IMO is a stupid move from the ECB. The low interest rates are another driver behind the housing prices going up and people risking more money in investments like stonks and crypto.
  - eru 5y ago
    The ECB has an inflation target. If inflation is too low, they have to put more money into the economy.
forgithubs 5y ago
This means they will eventually start applying negative interest rates to accounts under 100k
cloogshizer 5y ago
Multiple accounts on German invoices do not necessarily result from "tricks" to avoid negative interest. Sometimes they result from a time where it took several bank working days to process a money transfer between different banks. Having bank accounts at banks with large customer bases (e.g. Sparkasse, Postbank, ..) allowed for quicker money transfers from these customer to the company. A customer could choose any of these bank accounts to settle the invoice. Of course, a company could and can also have bank accounts not disclosed on an invoice. Edit: Also note, that negative interest especially for major "online" banks just became a thing in Europe recently. Therefore, I think it is not only Entrepreneurs who redistribute their assets to avoid negative interest eating up their savings in addition to inflation, but also normal people.
- imtringued 5y ago
  Bitcoin.de is not an exchange but it offers a service equivalent to an exchange if you sign up at the fidor bank. Since everyone using that feature of Bitcoin.de has a fidor bank the transfers are instant.
viktorcode 5y ago
No need to hide it because it is perfectly legal.
TheRealPomax 5y ago
Having a hard time calling this "exploiting" in a country where having different accounts with different banks is just something you do. Why would you have a single account with a single bank? Unless your account costs you loads of money instead of the banks going "thanks for your money, it's ours to invest how we see fit and profit off of, even if in theory you could withdraw it at any time. Which you won't". The dutch banking system is literally a foreign concept to North America. Imagine free accounts, free transfers to and from other banks, free ATM use, and not needing a credit card because banks actually did all the things that credit card companies put "on top of bank accounts" in the US. It's such a completely different system that analyzing the NL banking model with a pair of US glasses on just makes no sense at all.

luckylion 5y ago

Having multiple bank accounts isn't usually a thing to avoid negative interests in Germany. It's that payments between banks took three days to settle (I think they're down to 1 day now), while payments between accounts at the same bank usually settled immediately. It's much easier to have multiple accounts with the largest banks so most of your customers can use bank-internal transfers. Also, it's usually a good idea to have a backup just in case something goes wrong with your primary bank account. Dealing with bureaucracy is bad enough, dealing with it while you're also unable to send or receive payments is way worse.

traceroute66 5y ago
> It's that payments between banks took three days to settle (I think they're down to 1 day now) Isn't Germany subject to SEPA time constraints like everyone else ?
- ascar 5y ago
  SEPA is more relaxed than you might think. N26 has a nice explanation [1]: > ...[A]ll standard SEPA transfers should arrive within a maximum of 2 working days. Keep in mind that if a transfer is made just before a weekend or holiday, the time frame will be extended to a maximum of 3 working days. > You’ve probably heard that all SEPA transfers have to be completed within one “banking day,” so let’s clarify what that means—one banking day is equivalent to two working days due to the opening hours of the banks involved. Any weekday that is not a holiday is considered a working day. [1] https://support.n26.com/en-eu/payments-transfers-and-withdrawals/transfers/how-long-do-transfers-take https://support.n26.com/en-eu/payments-transfers-and-withdra...
  - sneak 5y ago
    If I'm reading this right, this is a theoretical maximum of five calendar days, if you send eg on a late night before a holiday weekend?
    - deleted 5y ago
      [deleted]
tluyben2 5y ago
Jikes, I am kind of used to swift transfers taking 1 day these days, let alone sepa, that should be max minutes. And I have not seen them take more for quite a while. Did not know it was that different in DE.
- xioxox 5y ago
  It's not great in DE for bank transfers. Either the account does not support sending SEPA instant or it's quite a large charge. Often savings accounts don't seem to be acceptable as destination accounts for SEPA instant.
- maverwa 5y ago
  AFAIK they have a limit of "at most one working day" since a few years ago. Which, in case of weekends, may still be several days. Because computers dont work on weekends!

blueblisters 5y ago

> It is not in the slightest bit uncommon to receive an invoice with four or five EUR bank accounts printed on it. You can randomly pick your "preferred" account to pay to and the company's accountant will rebalance the accounts at the end of the quarter (or wahtever). Why ask the customer to pick? Why not generate invoices with a randomly picked bank account (which can also lend itself to automatic rebalancing)?

traceroute66 5y ago
> Why ask the customer to pick? Why not generate invoices with a randomly picked bank account (which can also lend itself to automatic rebalancing)? Maybe its just my perspective having (mostly) dealt with SME's. I would guess larger companies are more clever about it (e.g. perhaps they have one "receipt" account and then the money gets automatically spread out from there once received).
deleted 5y ago
[deleted]
sokoloff 5y ago
If you send a different bank account every month to many companies, it’s going to get flagged by fraud checks in a lot of ERP/AP systems. (We have vendor records, including the payment bank account number. If your invoice matches and passes internal checks [we received the goods, we have money in the cost center, address/account numbers match, etc], it gets smoothly paid as agreed. If you rotate bank account numbers, it’s going to be kicked out to be manually checked and you’re going to get paid late.) You could load-balance once per-customer and not trip this, but that doesn’t get you fully automatic rebalancing.
- mikeryan 5y ago
  Also smaller less sophisticated vendors (I include my company in this) simply enter your remittance information once in their banking system on the first invoice. We aren't going to want to update it every time. They could have it randomize per vendor I suppose but all that is a lot of hassle when you can just put five accounts in the Payment Advice field in your accounting software and let the vendors do with it as they choose.

darkerside 5y ago

People do the same thing in the US to take advantage of FDIC insurance, which only goes up to $250,000. Not terribly novel.

petercooper 5y ago
UK business here.. we do the same because the UK equivalent guarantees bank accounts (even for businesses) at £85,000 (~$120,000) each. I have no idea what businesses with huge cash reserves do as you can quickly run out of banks.
- jonasdegendt 5y ago
  They put the money in short term treasuries, I reckon. Money market funds come to mind as well.
- joshfraser 5y ago
  you can have multiple accounts at the same bank. some banks like HSBC will take care of splitting it up for you behind the scenes.
  - joosters 5y ago
    The UK bank cover is per-bank, not per-account.
    - jfk13 5y ago
      Also worth noting that when a bank operates under multiple names, such as First Direct (part of HSBC) or Cahoot (a division of Santander), the cover applies to your total balance across all accounts, regardless of the name. So it's worth knowing which "banks" are really just different different brands of the same parent institution, if you're trying to diversify because of this limit.
  - bazzargh 5y ago
    No - your £85k guarantee is across all your accounts with that bank (even across the same group of banks). Straight from the source: https://www.fscs.org.uk/what-we-cover/banks-building-societies/ https://www.fscs.org.uk/what-we-cover/banks-building-societi... _If you have money in multiple accounts with banks that are part of the same banking group (and share a banking licence) we have to treat them as one bank. This means that our compensation limit applies to the total amount you hold across all these accounts, not to each separate account._

DocTomoe 5y ago

Historically, multiple bank accounts at different banks in Germany were a way to speed up payments, in a time when wire transfers were dependent on local distance and different banking networks which exchanged wire transfer data on magnet tape in central bank parking garages (and thus were called "Garagenverfahren"). Which ended not too long ago, IIRC in 2006... If you wanted the invoice to lead to cashflow quickly, you asked the customer to pay to an account that would speed up payment.

lbarrow 5y ago

Why would they try to hide this? It seems perfectly reasonable to do.

Cthulhu_ 5y ago
And legal; it's not like they're hiding their assets. It's a workaround from what IMO is a stupid move from the ECB. The low interest rates are another driver behind the housing prices going up and people risking more money in investments like stonks and crypto.
- eru 5y ago
  The ECB has an inflation target. If inflation is too low, they have to put more money into the economy.

forgithubs 5y ago

This means they will eventually start applying negative interest rates to accounts under 100k

cloogshizer 5y ago

Multiple accounts on German invoices do not necessarily result from "tricks" to avoid negative interest. Sometimes they result from a time where it took several bank working days to process a money transfer between different banks. Having bank accounts at banks with large customer bases (e.g. Sparkasse, Postbank, ..) allowed for quicker money transfers from these customer to the company. A customer could choose any of these bank accounts to settle the invoice. Of course, a company could and can also have bank accounts not disclosed on an invoice. Edit: Also note, that negative interest especially for major "online" banks just became a thing in Europe recently. Therefore, I think it is not only Entrepreneurs who redistribute their assets to avoid negative interest eating up their savings in addition to inflation, but also normal people.

imtringued 5y ago
Bitcoin.de is not an exchange but it offers a service equivalent to an exchange if you sign up at the fidor bank. Since everyone using that feature of Bitcoin.de has a fidor bank the transfers are instant.

viktorcode 5y ago

No need to hide it because it is perfectly legal.

TheRealPomax 5y ago

Having a hard time calling this "exploiting" in a country where having different accounts with different banks is just something you do. Why would you have a single account with a single bank? Unless your account costs you loads of money instead of the banks going "thanks for your money, it's ours to invest how we see fit and profit off of, even if in theory you could withdraw it at any time. Which you won't". The dutch banking system is literally a foreign concept to North America. Imagine free accounts, free transfers to and from other banks, free ATM use, and not needing a credit card because banks actually did all the things that credit card companies put "on top of bank accounts" in the US. It's such a completely different system that analyzing the NL banking model with a pair of US glasses on just makes no sense at all.