Is it correct that German “Savings Accounts” are to be considered in the LCR calculation only up to the threshold of EUR 2000,- penalty-free withdrawals per account?

Historically German “Savings Accounts” were legally subject to a preferential treatment. Though the appropriate regulation was abandoned customers still expect savings accounts that meet the following contractual conditions: The savings deposits have a 3 month advance notice for any amount to be withdrawn above EUR 2000,-. The depositor can withdraw a monthly maximum amount of EUR 2000,- per account without a penalty. Any amount over EUR 2000,- comes with a penalty that includes the loss of interests between the date of withdrawal and the contractual maturity date plus a material penalty. This penalty is called “Vorschusszinsen”. Both are regulated in the “Specified conditions of saving deposits” and apply for every depositor. The price of “Vorschusszinsen” is regulated in the banks schedule of price and services which is 25% of the current debit interests. Article 421(5) CRR allows institutions to exclude from the calculation of outflows clearly circumscribed categories of retail deposits provided that a) the depositor is not provided to withdraw the deposit within 30 days, and b) in the case of early withdrawals within the 30-day period the depositor has to pay a penalty which includes loss of interest and a material penalty. Both conditions are met for the deposit amounts above the threshold value of EUR 2000,- for the German “Savings Account”.

In calculating outflows on retail deposits under Article 421 (1) to (4) of Regulation (EU) No. 575/2013 (CRR), institutions may exclude from this calculation and report separately, in accordance with Article 421(5) of the CRR, any portion of retail deposits clearly circumscribed as a separate category. This is permissible as long as in each and every instance the institution rigorously applies the following conditions for the separate portion of those deposits unless in individually justified circumstances of hardship for the depositor which either:

1. cannot be withdrawn by the depositor within 30 days; or
2. where such deposits are permitted to be withdrawn within 30 days, such a withdrawal attracts both:
   1. a penalty that includes the loss of interest between the date of withdrawal and the contractual maturity date; and
   2. a material penalty that does not have to exceed the interest due for the time elapsed between the date of deposit and the date of withdrawal.

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Regulation (EU) No 575/2013 (CRR) and continues to be relevant.