Many savers feel confirmed in their risk aversion by the debacle surrounding Silicon Valley Bank and concerns about Credit Suisse. To leave your own money to the casino capitalists to play? No thank you.
Sweeping judgments are used to justify an inertia that comes at a high price. For years, people complained and scolded that the ECB had stolen our interest as if there were a natural right to it, and now that interest is back, savers remain lethargy. They wait until the interest rate comes to them. But he doesn't.
Until last July, banks had to pay a painful 0.5 percent penalty interest rate for deposits with the European Central Bank. Meanwhile, they get 2.5 percent interest on the money. This Thursday, the ECB even decided to raise the deposit rate to 3 percent. And what do savers do? Nothing. Most banks have not changed their credit interest. In two-thirds of cases, it is close to zero. Why should the banks change anything about this, as long as savers leave them with no interest? Every month of waiting brings banks high returns. Money that savers miss out on – an expensive lethargy.
No adventures needed
With just a little bit of their own drive, savers could get the banks moving. No adventure is necessary. There have long been offers from banks with German deposit insurance, which offer 2 percent interest and more for daily available money. Deposits at every bank are exposed to the risk of insolvency, including the house bank. However, deposit insurance works. During the financial crisis, even the biggest interest rate adventurers in Iceland were compensated.
In view of ECB interest rates of around 3 percent, the current interest rate offers are not dubious desperation offers by obscure banks, but an appropriate value in this interest rate landscape of providers such as Wüstenrot or HVB.
Interest rate comparison platforms have been doing good business again since the turnaround in interest rates. However, the big banks and savings banks shrug their shoulders at the one or two billion euros that are shifted through them to low-interest offers. Peanuts, bankers might have said in the past.
The Bundesbank's financial assets statistics show three trillion euros, which are lying around in Germany as cash and deposits largely interest-free. That's a three with twelve zeros. Per inhabitant, it is 36,000 euros and far more than the sensible reserve of three months' salary, in case the washing machine breaks down or the car needs new tires.
Of course, this money is unevenly distributed. However, the median is around 60,000 euros. This means that one half has less financial assets, the other half – and we are talking about more than 40 million people here – has more than 60,000 euros in financial assets. This does not include real estate. Two percent interest on 60,000 euros would be 1200 euros a year.
If it is too tedious to open an additional bank account with an interest-paying bank, you can also lend your money to one of the most solvent debtors in the world. The private investor exchange in Stuttgart records only a few dozen trading transactions daily in its most-traded bond, with which the Federal Republic of Germany promises a return of more than 2024 percent by June 3.
What more could the saver's heart want? Short term, best possible creditworthiness of the debtor, respectable return. The effort to buy such a paper consumes less time than the price comparisons on the Internet for all sorts of goods, looking for a few euros discount.
It is regrettable enough that skepticism in this country towards equities, the most profitable form of investment in the long term, is very pronounced. But if the turnaround in interest rates reveals that Germans also avoid solid bonds and interest-bearing savings accounts, then no one should be surprised if private old-age provision does not get off the ground – which is a disaster in view of the demographics in Germany and 8.7 percent inflation.
In a number of other countries, banks have passed on the higher interest rates far more to their customers. This is not due to their generosity, but to pressure from customers whose money otherwise moves elsewhere. This is called competition. However, this only works if there is a critical customer who not only compares the washing machine prices and reads test booklets, but also looks around to see what interest and returns are possible. The ECB interest rate around 3 percent is a good guideline. Waiting for the mercy of the house bank is an expensive inertia.