Banks in the Czech Republic broke free from the chain. They will deprive you of a lot of money, they invented a trick

Although it might seem that fees in Czech banks have significantly decreased compared to ten years ago and for many people they actually do not exist at all, in fact the opposite is true. Perhaps you have already asked yourself how it is possible that the big banks in the Czech Republic still have such huge profits when they don’t charge you much for keeping an account and common transactions. However, they have fees hidden elsewhere, and they are much more crushing.

The fees are still massive

Much has already been written about how much large banks in the Czech Republic earn, for example, from foreign transactions, which can cost you thousands of crowns, including currency conversion. In the same way, when you withdraw the local currency from an ATM abroad, you may not pay a fee for the withdrawal itself, but you will catch it at a significantly disadvantageous exchange rate.

However, the common practice of Czech banks, which charge outrageous fees for managing your money in various mutual and investment funds, is being pointed out more and more often. Financial analyst Jaroslav Brychta pointed this out in his Morning Commentary.

“I inherited less than 200,000 euros, which are now on a time deposit in Komerční banka. This gives (don’t be fooled) 0.01%. I was directly in the bank and they offered me their funds here, but I don’t like the entry fee of 1.5 to 3% and the management fee of 1 to 2% per year.” wrote one of the questioners who wanted to recommend a low-cost alternative.

It’s outrageous

In doing so, he came across a major scandal that is now taking place in Czech banks. Under the pretext of worrying about the financial health of their clients, they often discourage regular savings and push their clients into funds. As you can see, they actually do it mainly because they get huge returns from it. If you were to deposit 100,000 crowns in this way, you would easily pay 3,000 CZK for the entry fee and then another 2,000 CZK every year for money management. All in all, you’re minus five thousand in the first year, and you haven’t made anything yet. It is a standard risky investment that has no guaranteed return.

Analyst Brycht was literally blown away by these fees and called them crazy. “You must be kidding me. That’s unbelievable. Almost like the interest they give you there,” he paused over the conditions of Komerční banka, which, however, are also common elsewhere, for example at Česká spořitelna or ČSOB.

Read also: A popular bank unexpectedly goes bankrupt in the Czech Republic. The CNB is already intervening, it’s a lot of money

The interviewer was advised that he should go the route of low-fee passive funds, so-called ETFs. These also have fees, but they are around 0.1% to 0.2% per year, without any entry and exit fees.

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