This is the best fixed-term deposit offer
Encouragingly, interest rates for fixed-term deposits are reaching record levels. Saving is therefore attractive again. Finanztest reveals the best offers on the market and gives a few tips on what to look out for now and who you should entrust your money to.
The ECB's decisions in July, September, October and December 2022 and February, March, May, July and September 2023 had already led to rising interest rates on fixed-term deposits. This is because when banks park money with the ECB, they receive 4.00% interest - and at best pass this on to their customers. And there are actually a few offers from banks that are even above this mark and, above all, above inflation in Germany, which recently stood at 3.2 percent.
However, the range offered by financial institutions is sometimes somewhat confusing. Finanztest helps out with its fixed-term deposit comparison of 905 offers and reveals the safest and most profitable offers. The magazine only recommends investing in certain countries to ensure that your savings are secure. This is the case in Germany, for example. Or in countries such as France, the Netherlands, Austria, Sweden and the UK. The testers only consider their deposit guarantees to be so stable that investors can be compensated promptly in the event of a major bank failure. According to EU law, up to 100,000 euros per investor and bank must be protected.
Better safe than sorry
For money invested elsewhere, the EU also stipulates that this money must be protected. However, this first works via the respective countries, which are supposed to ensure this. If this does not succeed, the EU intervenes and tries to save the money for savers after all. But this is above all a political declaration of intent. Those who do not want to rely on European solidarity may not invest in Romania, Bulgaria or Malta after all.
Now that this has been clarified, here are the top fixed-term deposit offers for terms of one month to ten years.
If you would like a more extensive list, please take a look here, as more than 20 banks are currently offering interest rates of 4 percent or more for one-year fixed-term deposits and nine banks for five-year fixed-term deposits. For ten years, only Kommunalkredit Invest offers interest rates of over 4 percent, which may be due to the fact that the banks consider interest rate cuts to be very likely in the course of the coming year.
Comparison of fixed-term deposit accounts
Pay attention to the nominal interest rate
Apart from that, you should know the difference between interest and yield. Otherwise there is a risk of unknowingly reducing your return due to the trickery of some financial institutions. The interest rate only indicates the amount of interest on an investment and not the total return that can be achieved within a certain period of time. If the interest on multi-year fixed-term deposits is paid out to investors annually, the interest and return are identical.
Other offers credit interest annually to the investment account and pay interest on it in the following year - in this case, compound interest is paid. Here too, the nominal interest corresponds to the return. However, some providers only pay out the interest, without compound interest, at the end of the term. Accordingly, most fixed-term deposit offers on the Weltsparen interest rate portal are tax-final and without compound interest. Although interest is accrued, it is only calculated on the original investment amount - without taking into account the previous year's interest. The bank, not the investor, can work with the money. Overall, this reduces the return compared to the nominal interest rate. The testers eliminated such offers from their test. Anyone comparing interest rate offers on their own should pay attention to this.
Use a staircase strategy
Last but not least, savers can use the staircase strategy in the current environment. This means that not all savings are held in a single fixed-term deposit account, but are divided into different accounts with different terms. Because flexibility is important despite good offers, savers should not put all their assets into long-term investments.
You can find out how else to save successfully here.
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Source: www.ntv.de
