In the fight against inflation, the European Central Bank raised interest rates again on Thursday. On the one hand, this means that banks will find it more expensive to borrow money from the ECB. And on the other hand, that they get more interest if they store money with the ECB themselves. This is good news for savers. Because the incentive for the banks to woo customers with better interest rates is increasing.
A lot has happened in the past few months on the market that has been idle for years. According to the financial portal “Biallo”, interest rates for call money and time deposits are currently higher than they have been for 14 years. Some financial institutions now offer more than 3 percent interest on overnight money.
However, those who want to benefit from the return in interest rates may have to take their money to another bank. Because by no means all financial institutions pass on the higher interest rates to their customers. Every fourth bank still offers no interest at all on the money market account, according to an evaluation by “Verivox”. 180 of the 731 banks and savings banks surveyed are still in the doldrums. These include above all savings banks and regional cooperative banks such as Volks- and Raiffeisenbanken as well as Sparda and PSD banks.
Savers don’t have to accept that, especially since new customers get even better conditions from many banks than existing customers. It is easily possible to open a money market account at another bank and leave the current account at the house bank. If you have to get hold of the overnight money, you can transfer it back so that it is available on the checking account after one or two working days.
If you are looking for the best call money rates, you can use the FMH or Biallo interest rate comparison, for example, or the Stiftung Warentest. You should pay attention to two things in particular: where the bank is located and how long it guarantees the interest.
There are also many providers from abroad in the interest portals. This does not have to be a reason for exclusion, because in every country in the EU the respective statutory deposit insurance protects up to 100,000 euros per investor and bank in the event of a bank failure. However, not every country has the top credit rating (AAA) like Germany, and in an emergency savers in economically weak countries are more likely to face trouble. Stiftung Warentest therefore advises against accounts in southern and eastern European countries, even if they are in the EU.
When comparing the interest rate offers, one should also pay attention to bait offers. Many providers are currently advertising for new customers with top interest rates, which are only valid for six or three months. After that, interest often falls to a much lower level. For example, ING currently offers 3 percent interest on call money, but after six months only 0.6 percent apply. The Targo Bank offers new customers 3.2 percent, after six months but also only 0.6 percent. And the Comdirect lures new customers with 3.25 percent interest, which drops to 0.75 percent after six months. Anyone who stays with the bank beyond the promotional period will achieve a much poorer return than it first appears (you can read more about the effects of the interest bait offers from the colleagues at Finance Forward).
Savers who don’t want to move their money to a new money market account every few months – which is possible but tedious – can look around for offers that are good over the long term. The BMW Bank, for example, is currently offering three percent on sums of up to 50,000 euros without a time limit, although this can of course change in the future.
Alternatively, fixed-term deposits offer longer interest rate guarantees of sometimes well over 3 percent, for example for two or three years. With fixed-term deposits, savers do not get their money in the short term, but only at the end of the term, in contrast to overnight money.
