The interest consumers have to pay has reacted much more quickly to the European Central Bank's (ECB) rate hikes than the interest they earn on their savings.
In this way, the banks widen their interest margins.
Christian Siedenbiedel
Editor in Business.
Follow I follow
After all, interest rates on fixed-term deposits have more than doubled since the first ECB interest rate hike: On average for fixed-term deposit offers nationwide with a term of two years, savers now come to 2.09 percent a year, according to an analysis by the comparison platform Verivox.
At the beginning of August – and thus immediately after the ECB's first interest rate hike in July – the average interest rate was still 0.82 percent.
In the case of fixed-term deposits with a term of twelve months, interest rates have more than tripled in the same period, from 0.54 to 1.73 percent.
The difficulty here is that, despite everything, these interest rates are so low that savers are making a serious loss in real terms, i.e. after deducting inflation, which is currently 10 percent.
The capital market expert Hans-Jörg Naumer from Allianz Global Investors even thinks that there is a trap for savers in terms of behavioral economics: If, with slightly higher positive nominal interest rates again, they put their money in a savings account without worrying instead of investing it elsewhere because the pain of loss is less, if the amount in the account doesn't decrease - then they might lose a lot more through negative real interest rates as a result of high inflation.
"The market had priced in the ECB's expected rate hike to some extent in advance," reports Oliver Maier, Managing Director of Verivox Finanzvergleich GmbH.
Fixed deposit interest rates have been rising since June - the four key interest rate hikes by the ECB in the second half of the year would have reinforced this again.
Differences depending on the banking group
Depending on the banking group, however, the extent of the interest rate hikes varied: at 1.14 percent, the average interest rate for two-year fixed-term deposits at the cooperative banks was only a little more than half as high as for the offers available nationwide.
The distance to the savings banks is also clear: they paid an average of 1.21 percent for fixed-term deposits over two years.
"For the nationwide offers, the tougher competition among banks is causing higher interest rates," says Verivox interest rate specialist Maier.
“We are currently seeing intense competition for investors' savings, especially among the top providers.
In order not to fall behind, the institutes are forced to continually improve their conditions.”
German institutes are currently paying up to 3.1 percent for two-year fixed deposits – some banks based in other EU countries are even offering a little more at up to 3.36 percent.
Within the EU, deposits of up to 100,000 euros are protected by the deposit insurance of the respective country - however, the saver must trust in the ability and willingness of the respective country to compensate quickly and easily in the event of a crisis.
Niels Nauhauser, financial expert at the Baden-Württemberg consumer advice center, therefore says: "We advise investors who value security to only make deposits that are secured by the statutory compensation scheme of German banks."