Investors who want to invest their money in overnight accounts or time deposits are of course always looking for the best conditions to increase their returns. One way to find the best interest rates for banks is to compare conditions on the Internet. The respective portals compare the interest rates of all banks operating on the German market. These include not only the branch banks and the German direct banks, but also more and more often foreign banks that have discovered the German investor for themselves. The comparisons of the conditions show that the difference between the institutes is serious. The interest rates for overnight money vary from 1.5-7% pa, the situation is similar for time deposits. Some of the institutes only pay their customers a meager 3.8% for a one-year investment, while others grant almost 6% per year
Understand of the offer
With a system of 10,000 dollars, the difference is almost 200 dollars. Of course, some of these conditions are special quotas for new customers and are only granted on a temporary basis, despite this, the comparison shows that it can be worthwhile for investors to switch banks. Despite all the joy of the high interest rates, it should be checked exactly which bank offers them. Due to offers on the Internet, it is not always easy for laypersons to understand where this offer actually comes from. Meanwhile, banks from the Netherlands, Belgium and even Iceland are bustling on the German investor market. As a rule, these institutes can usually even be found at the top of the condition comparisons.
In contrast to most German banks, which are affiliated to the deposit guarantee fund of the German banking industry, whereby the customer funds are secured with several million dollars per customer, these institutions only have statutory deposit protection. In Belgium, Ireland and the Netherlands, this is only 20,000 dollars. Investors whose assets are smaller do not have to worry about foreign institutions if they encounter financial difficulties. Your money would still be covered in full. However, if you want to invest a higher amount, you should be aware of the risk you are taking. If financial problems now burden the bank, which would make the banking business no longer feasible, investors should expect to lose their funds of more than 20,000 dollars.
Some foreign banks have therefore founded German subsidiaries that still belong to the German deposit insurance scheme. This eliminates the risk for German investors. In most cases, whether and to what extent there is a deposit guarantee is already stated in the condition comparison. At the latest on the account opening request, however, the banks point out that the customer must even sign the knowledge of the amount of the deposit guarantee. But foreign banks are usually better not only when it comes to investments, but also with loans. The reason for this is the different interest rate levels of the countries. In these cases, however, you should always check in which currency the loan is taken out, because currency fluctuations should not be neglected. The duration of the fixed interest rate and the type of repayment should also be checked, as uncertainties can also arise here.