Bond markets are usually overshadowed by stocks.

But now they have become the center of attention with full force.

Something incredible, long forgotten, is happening there.

Yields are leaving the many years of negative interest rates behind them at a crazy pace.

In 2014, they slipped below zero for the first time.

They remained below this threshold until the end of January and again in early March.

And now, just a few months later, they're bringing in nearly one percent a year.

Dyrk Scherff

Editor in the “Value” section of the Frankfurter Allgemeine Sunday newspaper.

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That's not much, but bonds haven't seen such rapid increases in interest rates for decades.

It is truly a violent reversal that is happening.

Because savers can deal with bonds for the first time in a long time.

There is interest on money again – a new situation that is actually historically the norm.

That's how we learned it in school.

The world of interest rates, from which they had withdrawn for years, is now opening up again for private savers.

The pros kept to themselves.

Don't expect four or five percent a year like it used to be.

But two to three percent is possible with a moderate risk, sometimes even a little more.

And observers in the banks expect that interest rates will continue to rise worldwide because inflation will remain high.

"Inflation is here to stay," says Commerzbank chief economist Jörg Krämer.

Responsible for this are higher energy prices due to the Ukraine war and the recovery of the economy after the pandemic, but also controlled by climate policy.

The unprecedented financial injections from the state and central banks are also among the causes, as is increasing state protectionism.

Core inflation will level off at a higher level of more than 2 percent in the euro area.

Rate hike by September at the latest

That will drive interest rates higher.

Commerzbank expects a yield of 1.1 percent for federal bonds with a term of ten years by the end of 2022, and around two percent in 2024.

Next year there could be a brief slowdown to 0.8 percent because the economy will grow less strongly.

In America, government bonds with such maturities would bring in around 3.3 percent at the end of this year.

The central banks are now raising interest rates again after a long time.

For savers, this means that they can hope to soon be able to get a little more for overnight money again and that the period of negative interest on the current account will come to an end next year at the latest.

The American Federal Reserve took the first step on interest rates in March, and several more are to follow this year. Commerzbank expects the key interest rate to be 2.5 percent at the end of 2022 and 3.5 percent at the end of 2023.

The ECB could start the first interest rate hike as early as July, or September at the latest.

By the end of the first quarter of 2023, there could be three interest rate hikes of 0.25 percentage points each, assuming that there is no energy crisis, such as a gas embargo.

What does that mean for savers who, after a long time, want to earn money again with interest products?

First of all, it will not be able to compensate for the high inflation, so in real terms it will continue to lose money.

But he will see positive interest rates everywhere, and if you search well you will find investments that pay decent interest.

But where?

Fixed-term deposits are becoming attractive again

The obvious are daily and fixed deposits.

Interest is paid here again, but the level is still low.

For call money, the conditions of which are based on the key interest rate and can change daily (hence "call money"), there is currently up to 0.35 percent per year.

Up to 1.10 percent is paid for fixed deposits for 2 years, up to 1.30 percent for 5 years and up to 1.50 percent for ten years.

After all, that is more than can currently be earned with federal bonds.

However, federal bonds are also traditionally the bonds that yield the lowest yields in the euro area, because Germany is considered the most solid state and its bonds are the guideline for all of Europe and are therefore in demand accordingly.

That depresses returns.

A look at the rest of the euro area is more promising.

In the south in particular, higher interest rates are tempting.

Portugal and Spain pay almost two percent, Italy already 2.6 percent for ten years.

For five years, Italy offers 1.8 percent, Portugal and Spain 1.2 percent.

Italy's interest rate level is so high because fears of a government collapse and political instability are pushing down bond prices, which is pushing yields higher.

And because the country has such high debts.