Why are banks paying more interest on call money again?
The time has finally come – the long-awaited turnaround in interest rates has reignited competition for the highest interest rates among banks. After years of zero and negative interest rates, since the decision by the European Central Bank (ECB) in July, the banks no longer have to pay interest if they park money at the central bank, and actually make money from it. As a result, banks increasingly advertise for new customers, as this can result in a higher return. Existing customers are now also benefiting from interest on call money again, but usually to a lesser extent than new customers. So take the opportunity now and compare the offers of different banks to benefit from attractive interest rates.
Call money interest: These are currently the best offers
Call money or fixed deposit, that is the question
It is difficult to say in general whether an overnight deposit or fixed-term deposit is the better choice. Both forms of investment are still in high demand as they are safe and flexible. Overnight money offers money that is always available, while fixed-term deposits are invested for a fixed period of time – usually six, twelve or 36 months – and often offer higher interest rates. If you have a large investment sum and are not willing to invest your money in the stock market, it may make sense to open several overnight and/or time deposit accounts and split the money.
Our tip: Save taxes with an exemption order
Don’t forget to check if you’ve given your bank an exemption order for a tax-free capital gains allowance. Normally, the exemption order is only valid for one year. In January 2023, the allowance for singles was increased from 801 to 1,000 euros and for married couples from 1,602 to 2,000 euros. Use this opportunity and optimize your investment by not neglecting this important matter.
Important: Compare the offers regularly
If you are interested in investing your money in a money market account, you should compare the offers from different banks. It is important not only to pay attention to the amount of interest, but also to the conditions and fees. It’s a good idea to check interest rates periodically and upgrade to better deals if necessary.
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