Savers are happy that interest rates are rising again after the ECB’s interest rate turnaround. But for anyone who needs to borrow money, it is now becoming increasingly expensive. Above all, overdraft interest has risen more sharply in recent weeks than it has in years.

If you overdraw your checking account, you pay overdraft interest. In the future, consumers should pay even more attention to ensuring that their account does not slide into the red, because German banks have raised their overdraft rates sharply in recent weeks. Consumer advocates warn that some customers underestimate this effect, because: “Even in the phase of very low interest rates we had no special changes (in the overdraft interest, ed.)”, says Thomas Beutler from the Saarland consumer center.

A credit line on the checking account has never been cheap – but now it is becoming particularly expensive. According to the management consultancy Barkow Consulting, the average interest rate rose in November 2022 to its highest level in more than four years (measured from October 31, 2018). The November increase of 0.42 percentage points to 8.16 percent is actually the highest since the beginning of the time series more than 19 years ago (since January 31, 2003). And the end of the road has not yet been reached.

A recent evaluation by Stiftung Warentest also showed that interest on overdrafts is currently rising faster than it has been in years. “We have been observing a dynamic increase in overdraft interest since May 2022,” explains Heike Nicodemus, financial expert at Stiftung Warentest. The evaluation by Stiftung Warentest of around 170 banks with a total of 450 account models even resulted in an average interest rate of 9.94 percent for January 2023. In May 2022, this value was still 9.22 percent.

A look at the current account comparison from FOCUS online confirms that. There, individual financial institutions are already charging overdraft interest in the double-digit range. The most expensive banks in this area include Postbank, which charges up to 11.65 percent for overdrafts, Sparkasse Munich (11.60 percent) and Commerzbank (10.95 percent).

Other banks, on the other hand, are still holding back on overdraft interest; Examples are the N26 (8.90 percent), the ING (6.99 percent) or the PSD Bank Nuremberg (6.24 percent).

It can therefore be worthwhile for customers to switch their checking account to a cheaper provider that not only offers low overdraft interest, but also a free checking account. At some banks, such as ING, there is even a money bonus for new customers who open an account.

The ING not only offers a relatively cheap interest rate, new customers currently receive an additional 50 euros starting credit when opening a free current account until February 28th, 2023. If you pay with the VISA card at least five times within the first 4 months in stores, on the Internet or via Apple Pay and Google Pay, you will receive a bonus of 50 euros. ATM withdrawals are excluded.

Surf tip: You can find the best current accounts without account fees in this article or directly in our current account comparison.