Economic situation - Comparison portal: Fixed-term deposit interest rates fall again for the first time
For the first time in around one and a half years, interest rates on fixed-term deposit accounts have fallen again. However, the level is still comparatively high, according to data from the comparison portal Verivox. At the same time, property buyers and house builders can breathe a sigh of relief: according to the Check24 portal, building loans have become cheaper.
The European Central Bank (ECB) has countered high inflation in the single currency area with ten interest rate hikes in a row since July 2022. Savers have benefited from this, but it has become more expensive for builders. Most recently, the euro currency guardians paused interest rates. The central bank's next monetary policy decision is due today.
In the meantime, inflation has fallen more sharply than many experts expected. "Low inflation could prompt the central bank to lower its key interest rates earlier than previously planned. The banks are taking this into account when setting their fixed-term deposit conditions," explained Oliver Maier, Managing Director of Verivox Finanzvergleich GmbH.
Fierce competition
According to the Verivox data, as of December 11, savers received an average interest rate of 3.35 percent on fixed-term deposits with a term of two years for 10,000 euros from banks operating nationwide. At the beginning of November, this figure was still 3.39 percent. Fixed-term deposits invested for five years still earned an average interest rate of 3.15 percent, compared to 3.21 percent previously.
According to Verivox, the offers of regionally active savings banks and cooperative banks are on average lower than those of nationally active banks. " Interest rates at local savings banks and cooperative banks are falling much faster and more sharply than at banks that offer their savings products nationwide and are therefore exposed to much fiercer competition," explained Maier.
Verivox has not yet observed a decline in average interest rates for call money, but the increase has almost come to a standstill recently. For banks with a nationwide offer, interest rates in this area have increased minimally by 0.06 percentage points to an average of 1.71 percent since the beginning of November. Savers at savings banks (0.59 percent) and regional cooperative banks (0.58 percent) receive significantly less on average.
Lower interest rates for real estate loans
Property buyers, on the other hand, are benefiting from a fall in interest rates. "Banks are already pricing in possible interest rate cuts by the central banks in the coming year," said Ingo Foitzik, Managing Director of Construction Financing at Check24. Interest rates on ten-year German government bonds, which are used as a benchmark for real estate loans, have fallen accordingly.
According to data from the comparison portal Check24, the average interest rate for a building loan of EUR 400,000 is currently 3.34 percent per year (as of December 13). The interest costs therefore amount to 114,085 euros until the end of the ten-year fixed borrowing rate with a constant monthly rate. Compared to an average interest rate of 4.02 percent in October, this represents a saving of 28,771 euros in interest costs.
Changes to the interest rate affect developers who need a new loan or follow-up financing for a property loan. As a rule, nothing changes for current mortgage loans. The consumer portal Biallo.de also provides information on interest rates.
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- Oliver Maier, the Managing Director of Verivox Finanzvergleich GmbH, believes that low inflation could lead the central bank to lower its key interest rates earlier than anticipated, impacting the interest rates offered on fixed-term deposit accounts.
- Savers in Germany are currently receiving an average interest rate of 3.35% on fixed-term deposits with a term of two years, according to data from comparison portal Verivox, a slight decrease from 3.39% in early November.
- Consumers looking for a fixed-term deposit can use the comparison portal Check24 to compare interest rates offered by various banks, helping them make informed decisions about where to invest their money.
- Regional savings banks and cooperative banks in Germany have average interest rates on fixed-term deposits that are lower than those offered by nationally active banks, according to Verivox data, which reveals that these banks are under more intense competition.
- The European Central Bank (ECB) has raised interest rates ten times since July 2022 to combat high inflation in the single currency area, but recent data shows that inflation has fallen more sharply than expected, leading some experts to speculate that interest rates may be lowered earlier than planned.
- Erik Nielsen, Group Chief Economist at UniCredit, pointed out that the ECB's monetary policy has had the intended effect of reducing inflation, causing German prices to rise at a slower pace than in the past, but also causing economic uncertainty due to the high level of interest rates.
- Frankfurt on the Main, Germany, is home to several major banks, including Deutsche Bank and Commerzbank, and has become a central hub for financial activity in the country, making it an important location for monitoring interest rates and the economic situation.
Source: www.stern.de
