Despite the turnaround in interest rates, many banks continue to pay existing customers hardly any returns on call money and fixed-term deposits. Savers who regularly switch to the best provider significantly increase their income: interest hopping usually brings in thousands of euros in the long run.
While banks quickly pass on rising interest rates on loans, many of them take their time when it comes to investments: overnight and fixed-term deposits are yielding nothing or almost nothing for existing customers a good nine months after the start of the interest rate turnaround at many institutions. Many savings banks continue to pay investors no interest, other large banks are also usually below 0.5 percent.
For comparison: At the European Central Bank (ECB), banks currently receive two percent interest on deposits. However, many institutes pocket most of this income themselves instead of passing it on to savers.
Particularly annoying: New customers often receive significantly better conditions than loyal existing customers. The Consorsbank lured new savers with 2.1 percent interest on overnight money, but fed off existing customers with 0.3 percent. ING-Diba pays loyal customers just as little, but attracts interested parties with two percent. At many large banks, the gap between new and existing customers is just as wide. After six to twelve months, new customers lose their higher interest rate and find themselves in the same dilemma as existing customers.
Savers are turning the annoying interest rate gap into a profit by using an almost forgotten strategy: interest rate hopping. Similar to how many electricity and gas customers regularly switch providers in order to take advantage of constantly new lure offers, this strategy is also worthwhile again for investments due to the rise in interest rates. Anyone who secures overnight money accounts with high interest rates currently earns around two percent more per year than customers who stay with one provider.
Savers who have been shaped by the low-interest phase and who have become accustomed to uniform interest rates around the zero line should throw their bank loyalty overboard. With minimal effort, many of them make thousands of dollars by rediscovering the hopping strategy. A look at the latest comparison test, a click on the best provider, fill out a form. Finished. In the long run, most savers earn more money with this than with regular electricity supplier changes.
A calculation example shows why two percent additional interest creates huge differences for savers: If you invest 10,000 euros in savings at zero percent interest, you will still have 10,000 euros in ten, 20 and 30 years. Anyone who receives two percent interest will have more than 12,000 euros in ten years, almost 15,000 euros in 20 years and more than 18,000 euros in 30 years. With just a few clicks, he earned over 8,000 euros – an increase of around 80 percent.
Since this effect also affects larger amounts, people with larger savings should switch accounts regularly. Anyone who invests EUR 100,000 at two percent annual interest will have EUR 80,000 more in their account in 30 years than savers without interest.
The 80 percent difference provides investors with an important rule of thumb, because a two percent difference in return in 30 years always leads to an 80 percent difference in earnings. Anyone who receives four percent on their overnight allowance will have 80 percent more in 30 years than someone who receives two percent. The same applies to customers with six instead of four percent interest or eight instead of six percent.
If the ECB continues to raise its key interest rate and the banks pass this increase on to their customers at different speeds, the interest rate comparison is worthwhile in the long term. Anyone who parks money on overnight money should regularly move to the bank with the best interest rates.
What increases the yield of call money savers also applies to fixed-term deposit investors: instead of blindly trusting the offers of the house bank, they also increase their earnings by comparing interest rates. Depending on the investment period, the FOCUS online interest rate comparison even offers interest rates of up to 3.5 percent, while many large banks continue to pay around zero percent.
