After the interest rate turnaround by the ECB: Negative interest rates are falling - savers are of little use

ING Germany set the pace.

Only twelve minutes after the European Central Bank (ECB) abolished negative interest rates by raising interest rates by half a percentage point, Germany's third-largest bank by customer sent out a press release with the headline "Interest for savings".

From August 1, the direct bank will again pay its existing customers up to 1.5 percent interest on savings certificates, depending on the term.

In terms of custody fees, the subsidiary of the major Dutch bank ING was ahead of the competition anyway.

By raising the exemption amount to EUR 500,000, it effectively abolished negative interest rates on July 1, and they will fall unconditionally on August 1.

Archibald Preuschat

Editor in Business

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Christian Siedenbiedel

Editor in Business.

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One thing is certain, the negative interest rates so hated by German savers will soon be history.

Commerzbank shows no culpable hesitation: it has lifted the custody fees for its customers retrospectively as of July 1st.

The Hamburger Sparkasse (Haspa), the largest in the republic, will waive custody fees with immediate effect.

The Frankfurter Sparkasse wants to do this on July 27th.

From this day on, the new key interest rates decided by the ECB on Thursday will come into effect.

The Bayern LB subsidiary DKB has also set this deadline to abolish the custody fees.

Deutsche Bank, meanwhile, is taking significantly more time: "Following yesterday's interest rate decision by the ECB, Deutsche Bank and Postbank will no longer have custody fees in retail customer business during the month of August,"

So far so good, but what about interest rates?

Haspa, which boasts that it is “one of the leaders in a nationwide comparison”, has been offering its customers 1 percent since April, but the saver has to set the amount for three years.

The DKB states, however, that “no final decision has yet been made” on interest on the DKB daily allowance.

Commerzbank also wants to “observe the markets first”.

Lots of rate hikes

Horst Biallo from the consumer portal of the same name reports “lots of interest rate increases” at the moment, including at SWK Bank, Klarna, Renault Bank Direct and Hypo-Vereinsbank.

On average, Max Herbst from FMH-Finanzberatung, who also continuously compares interest rates, comes to 0.65 percent a year for fixed-term deposits over twelve months and 1.14 percent for fixed-term deposits over five years.

"The savings book interest rates will only feel something of the key interest rate hike at the very end," says Herbst.

In any case, the interest rates that banks and savings banks will be offering their customers in the coming weeks and months are just a drop in the ocean.

Because parking your money in the account for the long term still represents a loss of assets in view of the current inflation rate in Germany of 7.6 percent. ECB President Christine Lagarde already assured this on Thursday that the rate hike this week will not be the last have been.

The central bankers only want to decide how big the rate hikes will be, 25, 50 basis points or even more, from meeting to meeting.

It is therefore probably not worthwhile for savers to invest larger amounts over several years.

It is more advisable to wait and see how interest rates develop.

But the truth is also that the real interest rate, i.e. the interest rate after inflation, is negative in view of the high inflation and will remain so for some time to come.

Because it is uncertain when and if at all the ECB will manage to push the inflation rate back to around 2 percent with the interest rate turnaround that has now been initiated.

The global economic situation is too complex for that.

The weak euro alone is responsible for inflationary imports, since many raw materials are billed in American currency and are correspondingly expensive in the euro zone.

The wealth of savers will continue to shrink for the foreseeable future, albeit not quite as sharply.

However, if you are planning to build a house or buy a property, you should not hesitate.

LBS Bayern assumes that the trend towards rising mortgage interest rates will continue over the course of the year.

In view of the high inflation, further interest rate hikes by the ECB are indicated.

In addition, the increased equity capital requirements of the Bafin supervisory authority are contributing to the more expensive financing conditions in Germany.

"Since the announcement in June that the ECB will raise interest rates, interest rates on ten-year real estate loans have initially risen by more than half a percentage point," says Jörg Utecht, CEO of credit broker Interhyp.

At the moment, however, one sees a small setback in interest rates.

"As of today, the interest rate for ten-year loans is 3.04 percent."

that the interest rate hikes were largely priced in and that concerns about the economy are gaining in importance: "We expect a moderate further increase in building interest rates in the further course of the year - at the end of the year we expect an interest rate level of around 3.5 to 4 percent for ten-year loans. Yields on European government bonds, which initially rose on Thursday, fell significantly on Friday.

"The European Central Bank has delivered," comments Ralfcircul from Helaba.

Some uncertainties are now off the table.

The yield on the federal bond with a term of ten years lost an impressive 18 basis points to 1.035 percent - that of the corresponding Italian bond as much as 21 basis points to 3.306 percent.