The European Central Bank has again increased the key interest rate. It’s the largest rate hike in history. The key interest rate rises to 1.25 percent. The increase is basically good news for bank customers. FOCUS Online says what now applies to loans, the savings book and money market accounts.
The ECB has increased the key interest rate in the euro area by a further 0.75 percent. The key interest rate was last raised on July 18, from zero to 0.5 percent.
It’s the second rate hike in two months to fight record inflation. From now on, banks have to pay 1.25 percent interest when they park funds with the ECB. Many financial institutions pass the costs on to customers.
Negative interest rates will finally disappear. Many financial institutions had already started a few weeks ago to reduce the negative interest rates on overnight and fixed-term deposit accounts.
Savers can hope for interest on the savings book, fixed-term deposit or call money account.
In view of the rapid rise in interest rates, classic investments such as overnight and time deposit accounts are becoming more attractive. For example, the first banks have increased interest rates, especially for short, but also for medium terms. A dynamic that, from the point of view of the comparison portal, could even accelerate over the course of the year.
Two percent and more interest for a two-year fixed deposit could be possible this year.
A look at the interest rate comparisons from FOCUS Online shows how much the interest rate landscape has already changed. For overnight money, consumers can currently get 0.55 percent interest per year at Renault Bank. There, the French deposit insurance protects deposits of up to 100,000 euros. In the FOCUS Online fixed deposit comparison, the current leaders Illimity (Italy) and Payray (Lithuania) each offer 1.9 percent for an investment period of just twelve months. For two-year time deposits, the two banks mentioned even pay 2.05 percent per annum.
In contrast to interest on savings, lending rates are likely to continue to rise.
“Rising market interest rates are usually passed on directly to customers here,” says Philipp Rehberg from the Lower Saxony Consumer Advice Center, for example. This affects consumers both in the case of real estate and overdraft facilities (Dispo) and consumer loans.
The consumer advocate recommends keeping an eye on expensive overdrafts and only using them in the event of short-term financial bottlenecks. In the long term, normal consumer credit usually makes more sense.
In the case of expiring real estate loans, the question now arises as to how things will continue after the end of the fixed interest rate period. However, nobody can predict with certainty how construction interest rates will develop in the medium and long term, says Rehberg.
Whether a forward loan – i.e. the early commitment to follow-up financing at a fixed interest rate – makes sense must be decided on a case-by-case basis. “The primary goal should always be to secure the financing so as not to jeopardize the preservation of the property,” says the consumer advocate.
