2023-09-15 18:38:41
The ECB’s interest rate increases are not reaching savers everywhere. (Symbolic image) Image: Shutterstock
Many banks and savings banks are not passing on the record high ECB deposit interest rates. It’s high time for savers to take action. Comparison of overnight money, fixed-term deposits and bonds
The European Central Bank (ECB) increased the deposit interest rate from minus 0.5 percent to 4 percent within 14 months at record speed and extent. Banks have never received such high interest rates for money deposited with the ECB. From October 2000 to April 2001 the interest rate was 3.75 percent. Afterwards, the fight against recession, the financial crisis and the euro crisis pushed interest rates to record lows and even into the red. The banks should not just park the money, but put it into circulation as (cheap) loans.
With the outbreak of the war in Ukraine, the world of interest rates changed fundamentally. Money should now be held back, loans should be granted less frequently and, if so, more expensively, in order to dampen economic activity and thus rein in inflation. This interest rate development is positive for savers. Inflation, still at around 6 percent, is eating away at savings. Because: After eight years of negative deposit interest rates from the ECB, according to the Bundesbank, savers in Germany still had more than two trillion euros available daily at zero and negative interest rates, which is far more than before the low interest rate phase and also far more than they had in stocks or shares have invested funds.
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