State Street Corp. and Bank of New York Mellon Corp., two of the world’s biggest custody banks, will charge depositors to hold Danish kroner and Swiss francs as customers seek refuge from the crisis-stricken euro.
State Street will apply a negative interest rate of 0.75 percent annually to krone deposits starting Nov. 1, with a separate charge for francs, according to a note to clients last week. That means money managers, insurance companies and pension funds must pay the bank to hold their cash. BNY Mellon started charging for krone deposits last month, a person with knowledge of the matter said. The lender isn’t charging for francs.
State Street plans to charge 0.25 percent for accounts in Swiss francs, the Boston-based company said in last week’s note to customers, which was obtained by Bloomberg News. The contents were confirmed by a bank spokeswoman, Carolyn Cichon.
The Danish central bank cut its deposit rate to negative 0.2 percent in July, and Switzerland cut its benchmark rate to near zero in September 2011. Jean-Pierre Danthine, a vice president with the Swiss central bank, said in June that it might impose negative interest rates “if the circumstances warrant it.”