Finances - Study: Interest rates on savings are dropping - but not for credits
Savings account holders are receiving lower interest rates from banks on Tagesgeld (savings accounts) than they were a few weeks ago. However, interest rates for mortgage and installment loans have not decreased, according to an analysis by comparison portal Verivox.
On average, regional banks paid 1.69% (as of July 15), down from 1.72% in early June. Spark accounts and regional cooperative banks had significantly lower interest rates, with an average of 0.62% and 0.64%, respectively. These rates also decreased slightly further.
Trending downwards for fixed deposits as well
"Many banks and savings banks quickly passed on the most recent interest rate cut by the European Central Bank (ECB) to their savers," said Verivox. In June, the ECB lowered its benchmark interest rates in the Eurozone for the first time since the inflation wave by 0.25 percentage points. Since early June, at least 64 financial institutions have reduced their savings account interest rates, according to Verivox, representing around eight percent of the 765 banks and savings accounts analyzed. However, there were also interest rate increases at four banks. Verivox regularly analyzes savings and fixed deposit interest rates for a deposit of €10,000.
The average interest rates for offers with a term of two years also fell, according to the comparison portal, from 2.82% in early June to 2.79%. In November, they were at 3.39%.
The situation for savers remains closely tied to the monetary policy of the ECB. The ECB will make a decision on interest rates on this Thursday.
No relief for homebuilders
The situation is less encouraging for borrowers. According to Verivox, there has been little movement in mortgage rates since June. The interest rates for loans with a 10-year interest rate commitment were 3.71% and for loans with a 15-year interest rate commitment, they were 3.85%. In the coming weeks, mortgage rates are expected to remain stable, according to Oliver Maier, Managing Director of Verivox Finanzvergleich GmbH. The interest rate decisions of the ECB have only a indirect impact on mortgage rates, which are based on the yield of ten-year German government bonds.
Verivox even reports a slight increase in average interest rates for installment loans to 6.89%. This is due to the fact that several banks have loosened their lending criteria following the ECB interest rate cut, according to Maier. This helps consumers with weaker creditworthiness. "Due to the greater risk, banks demand relatively high interest rates for these loans."
- Despite the ECB lowering its benchmark interest rates by 0.25 percentage points in June, savings account holders in Germany are still receiving less money in interest on their Day Money accounts.
- Verivox, a comparison portal, has found that various banks and savings banks have passed on the ECB's interest rate cut to their savers, leading to decreased interest rates on Tagesgeld accounts.
- Regarding loan products, there has been little movement in mortgage and installment loan interest rates since June, according to Verivox Finanzvergleich GmbH. However, the portal reports a slight increase in average interest rates for installment loans, which is attributed to banks loosening their lending criteria following the ECB interest rate cut.
- Frankfurter Allgemeine Zeitung reported that German consumers should consider switching to banks with better interest rates, as even small difference in interest rates can amount to significant savings over time.
- While it may seem counterintuitive, lower interest rates might not necessarily be beneficial for all credit rating categories, as banks may demand higher interest rates for loans with lower credit ratings due to increased risk.
