The savings book was yesterday

The passbook was long considered the Germans’ favorite form of investment. Even today, several hundred million or even billions of euros lie dormant on this form of investment, which is usually quite low-interest, which would achieve a significantly higher return on savings account alternatives. In addition, for example, overnight money, which is just as secure as a savings book, is much more flexible, as there is no notice period and the money can be accessed on a daily basis.

While around 1.9% interest per year is paid on an average savings book, it is usually 4.0% pa and more on a call money account. With an investment amount of 5,000 euros, this makes a difference of 105 euros per year – not bad at all, for a change that does not even take an hour.

When choosing the appropriate form of investment, care should always be taken to ensure that there is sufficient deposit insurance. A distinction must be made here between state-guaranteed security and banks’ voluntary security funds. Particularly with foreign banks, caution should be exercised here, as the case of the Icelandic Kaupthing Bank showed.

Particularly attractive money market accounts, virtually the alternative to savings accounts, offer mostly so-called direct banks. A direct bank is a financial institution that does not have its own branches and instead handles the account management online, by telephone, or by post. Since the expenses for rent and personnel are very low, these banks can usually pay high interest. Often, however, direct banks are subsidiaries of large banks, for example, comdirect bank belongs to Commerzbank, norisbank belongs to Deutsche Bank.

After the key rate increase: Fixed-term and overnight interest rates rise

After the European Central Bank (ECB) increased the key interest rate, the fixed and overnight interest rates of numerous banks are also rising. As the online call money account shows, online banks, in particular, i.e. institutions that do not have their own branches, offer particularly attractive conditions. With an interest rate of 5.65% pa in the first six months, the offer from the Icelandic Kaupthing Edge Bank currently tops the top list. However, offers from German banks, such as the TagesgeldFlex from GE Money Bank, offer extremely attractive conditions at 5.0% pa, guaranteed until the end of 2008.

The perfect addition to an attractive overnight money account is a free current account, which can quickly save 10 euros per month and more, since many accounts already include services that are otherwise chargeable, such as credit cards. The fees saved in this way of, for example, 10 euros per month could be put in a call money account. If this were to be paid interest at 5% interest pa over the entire term and the interest was credited annually, you would have accumulated an amount of over 1,500 euros after 10 years – and that without additional financial expenses.