As of: March 7, 2024, 10:10 a.m
By: Andreas Jalsovec
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Savings interest rates are again well above inflation © IMAGO/Daniel Scharinger
Inflation is at its lowest level in more than two years.
With fixed-term deposits, savers can now significantly beat inflation again.
What you should pay attention to.
Savers have had to wait a long time for this: the interest rates on savings investments are finally significantly higher than inflation again.
According to an initial estimate by the Federal Statistical Office (Destatis), the inflation rate in Germany was 2.50 percent in February.
It hasn't been this low since June 2021.
For comparison: If you invest your money in a fixed-term deposit account, you will receive significantly more than three percent from many banks.
With fixed-term deposits, savers invest a sum for a set period of time and receive a fixed interest rate.
However, they must be able to do without the money during the term, because they generally do not have access to it during this time.
Well over three percent is still there
The fact that fixed deposit interest rates are now so high again has to do with the European Central Bank (ECB).
Since mid-2022, it has rapidly increased its key interest rate.
It is currently at 4.50 percent, which is the highest it has been since May 2001.
The monetary authorities raised the interest rate to this value on September 20, 2023.
Since then, however, the key interest rate has remained at this level and most capital market experts expect the ECB to lower interest rates again later this year.
As a result, a number of banks have reduced their daily and fixed-term deposit interest rates in recent weeks, some significantly.
Investors should now secure the comparatively high interest rates on fixed-term deposits.
Savers can now almost always find fixed-term deposit providers with terms between six months and ten years that offer significantly more than three percent per year.
The Austrian Vakifbank, for example, pays 3.75 percent interest over a six-month term.
Openbank from Spain only offers slightly less at 3.70 percent for six months.
SBI Frankfurt offers an interest rate of 4.10 and 4.20 percent per year for investment periods of one and two years.
These are the highest fixed deposit interest rates on the market - although the minimum deposit is a whopping 20,000 euros.
At five years, the Dutch Leaseplan Bank is at the top with 3.90 percent and Renault Bank Direkt with 3.25 percent.
Over ten years, two German banks can shine with above-average interest rates - Pbb Direkt and SWK Bank each pay 3.00 percent per year.
Don't just look at the interest rates
However, savers should not just look at the interest rate when making a fixed-term deposit.
What is important is the return at the end of the term.
This also depends on whether the bank reinvests the interest that is due during the term.
An example: With a term of five years, Pbb Direkt pays 3.00 percent and reinvests the interest income directly.
With an investment amount of 10,000 euros, you end up with interest income of 1,592.74 euros before taxes.
Procredit Bank, on the other hand, offers a higher interest rate of 3.10 percent, but pays out the interest income annually.
The interest income is then 1,550 euros after five years.
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And something else is important with fixed-term deposits: the security of the investment.
Within the European Union, savings deposits of up to 100,000 euros are protected by statutory deposit insurance.
This means: If a bank goes bankrupt, the national security fund is responsible for the customers' deposits.
The creditworthiness of the respective nation state provides a good indication of the reliability of the deposit insurance.
Countries like Germany, Sweden or the Netherlands offer the highest level of security.
But French or Austrian deposit insurance also guarantees a high level of protection.
Spread money over different terms
And how long should savers currently invest their money for?
That depends on how long you can forego the investment amount - and how the interest rates develop in the future.
The ECB is currently keeping its key interest rate constant.
Experts assume that this will be the case until mid-2024.
Then it could go down again - but only if inflation continues to fall.
Savers should therefore divide their money into short and long terms.
They should invest the larger part for six months or a year.
Then you remain flexible if interest rates rise again.
However, you can invest a smaller portion for five or ten years.
This means you can secure today's interest rate levels in the long term.