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Photo: Monika Skolimowska / dpa
For years, interest rates were passé for investors in Germany.
If you brought your money to the bank, you should be happy if you didn't have to pay any fines.
But now something is happening again on the market.
The banks are gradually increasing their offers for fixed-term and overnight accounts.
Trade Republic is now the first German neo-broker to enter the business with customer deposits - and with an unusual announcement: the company is now offering two percent annual interest on customers' money balances.
The offer is valid up to a balance of 50,000 euros, the interest income will be credited monthly, according to the company.
Unlike other providers, the offer is not limited in time, the interest rates apply in the current market environment until further notice.
However, the provider reserves the right to change the interest rates offered at any time - i.e. to lower them again.
The neo-broker, who has already attacked the banks in the area of share transactions, is also putting pressure on traditional financial institutions in the deposit business.
So far, only a few domestic providers have offered similarly high interest rates: Consorsbank, for example, with 2.1 percent for new customers (limited to six months) or ING with 2 percent (limited to four months).
With fixed deposits, there are sometimes more than 3 percent in it again – if you commit yourself for three years.
There are, for example, offers from Crédit Agricole Consumer Finance or the Weltsparen interest rate portal.
Trade Republic has so far focused entirely on trading in shares or index funds (ETFs).
The fact that the company is now also attacking in the interest business could also drive competitors to make even better offers.
Provider suffers from stock market slump
Savings accounts have been making a comeback in Germany for several months.
Since the European Central Bank (ECB) raised interest rates to 2.5 percent to combat inflation, banks have been tightening interest rates on savings accounts.
But it is also clear that the interest rates, which are now positive again, are far from offsetting the inflation.
In real terms, i.e. taking into account the high rate of price increases, savings continue to lose value.
However, the loss is significantly lower than if you simply leave the money in the checking account.
Most recently, Trade Republic suffered from the fact that Germany's investors became more cautious in times of falling share prices and traded less with shares.
In the past two years, the provider had experienced a trading boom.
During the pandemic, young Germans in particular flocked to the stock exchanges: in 2021, around 49,000 under-30s bought securities for the first time.
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