The ECB’s key policy has an impact on all savings models of the banks. You can read why the ECB lowers the key interest rate and where savers still get attractive interest on overnight money and fixed deposits.
The European Central Bank (ECB) has once again reduced the key interest rate by 0.25 percentage points and is now at 2.75 percent. This is a measure to support the economy by getting loans cheaper. But what does this mean for savers who are looking for attractive investment options, especially if you still want to achieve over 3 percent interest? The following article provides an overview of the reasons for the key interest rate and possible options for savers.
Why does the ECB lowers the key interest rate?
The ECB lowers the key interest rate to promote economic growth. By becoming cheaper, companies can invest more easily and finance consumers faster. In times of weak growth, this should boost the economy. The key interest rate is also an instrument to achieve inflation goals. However, a lower key interest rate can lead to saving deposits less attractive as interest income drops to savings accounts.
How does the key interest rate have a effect on bank interest?
A reduction in the key interest rate tends to lead to banks reducing interest rates for savings products. Savers must therefore look for alternative investment options that continue to offer attractive interest rates. However, there are also banks that, despite the key interest rate, offer above -average interest rates to win or keep customers.
Which banks are there still good interest?
Even if many banks couple their savings interest on key interest rates, there are institutes that continue to offer attractive interest rates for savers due to their business strategy or special offers. Some direct banks or online platforms still offer fixed deposits or overnight deposits with interest of over 3 percent. These usually offer better conditions than traditional branch banks.
These are three top call money providers:
Consorsbank*: 3.25 percent interest pa in the first three months plus 40 euros start bonus.
TF Bank*: 3.05 percent interest pa in the first three months.
comdirect*: 2.75 percent interest pa in the first three months.
Tips for maximizing your interest income
In order to continue to benefit from attractive interest rates, savers should consider some strategies:
- Compare offers from different banks and platforms regularly.
- If you want to invest your capital longer, also think about a fixed deposit account, which offer longer terms at attractive interest rates
- Pay attention to special promotions or new customers that promise temporary interest rate advantages.
- Inquire about alternative investment products that can also be profitable.
These are three top fixed deposits:
Consumer Finance*: 2.75 percent interest pa for 6 to 24 months.
Bank of Scotland*: 2.60 percent interest pa for 6 months.
SWK Bank*: 2.50 percent interest pa for 12 months.
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