The best interest rates for all cases

Dhe world of interest rates has gotten mixed up. After years of deep sleep without significant interest, there are now four percent and more to earn without major risks. However, interest rates are currently fluctuating quite strongly. Everywhere, long-lost interest products are becoming popular again: call money and fixed-term deposits, bank and fixed-interest bonds, even savings bonds are back. And bond funds and government bonds had never disappeared from view anyway.

Dyrk Scherff

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

This diversity is confusing for savers. He will now find several suitable products for every goal – depending on whether he needs his money at all times, saves for a purpose in a few years or provides for long-term retirement. Here are the best recommendations for every situation in life.

I need a buffer in case of an emergency

Unfortunately, life doesn’t always go as planned. And when things turn out differently, it often has financial consequences. The car gives up the ghost and has to be repaired at great expense, water damage in the house is annoying, and the refrigerator broke: for such cases you always need a financial cushion that is available at all times. Experts recommend three to six months’ salary for this. This amount must not be fixed for several years. Traditionally, the money lies around in the current account without interest, but there is a better way. After all, the safety reserve may not be needed for years. Then a little interest for it would be quite nice.

This works well with a call money account. Some banks already pay more than three percent interest per year (see grafic), at least for new customers. And that’s the catch. Interest rates are only secured for the first three to six months, after which they drop, sometimes below one percent, and can change daily. Either you change banks or you are happy that there is a little more interest than on the interest-free checking account. Another disadvantage: You have to plan some effort for the account opening. The house banks also offer overnight money, but at significantly lower interest rates.

My construction loan is due soon

There are circumstances where money is left over now but will be needed at some point in a few years. For example, if a construction loan is then to be replaced. Or a career break begins, for example for a sabbatical, for which reserves have to be saved. Then money will be needed in four years and five months. There is no fixed deposit for such odd savings periods. This is offered for six months or three or four years, for example. Bearer bonds that are sold as fixed-interest or bank bonds or as interest certificates, but are not subject to deposit insurance and are therefore a bit riskier than fixed-term deposits, could help.

All major banks have something like this on offer. At Dekabank, which belongs to the savings bank group, fixed-interest bonds were the top-selling bond last year. The volume has increased tenfold compared to 2021, when there were only mini interest rates even for long maturities. New fixed-interest bonds are currently being issued every three weeks together with the partners Société Générale, Goldman Sachs and Helaba, so there are suitable papers for every term. They are subscribed to via the savings bank, i.e. not bought on the stock exchange. That saves fees. It’s similar outside of the savings banks.

The savings bank customer currently gets 2.7 percent for two years but less than with fixed-term deposit offers, some of which offer more than three percent. On the other hand, fixed-interest bonds have an advantage: They can be sold at any time when money is needed, but there can be a loss. Fixed-term deposits, on the other hand, cannot be terminated early. Papers from the state banks sometimes yield four percent for two and a half years.

Another option is to first invest the money as a fixed-term deposit and then switch it to overnight deposits for the remaining months until it is needed. However, you then do not secure the current interest rate for the overnight money, but have to accept the then valid, possibly lower level.

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