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Canada Negative interest rates are abolished: Why the checking account is still not worthwhile, this sample calculation

09:50  31 july  2022
09:50  31 july  2022 Source:   businessinsider.de

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  Negativzinsen werden abgeschafft: Warum das Girokonto sich trotzdem nicht lohnt, zeigt diese Beispielrechnung © Getty Images

The interest turn is here. The European Central Bank (ECB) raises interest rates and thus specifies the route for the banks in the euro area. Some banks are already reacting and deleting their negative interest rates for the checking account, they highly raise their allowances and occasionally they even pay interest again.

Now you could imagine: Thank God I have survived the time of negative interest rates and can leave my money back to the checking account. But is it really like that?

A total of 2.1 trillion euros are on German giro and call money accounts- just under 30,000 per adult. The following sample calculation shows what happens to a wealth of 30,000 euros if you simply leave it on the checking account.

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only 0.05 percent interest

We assume that you compare the checking accounts with each other and the conclusion comes to open an account with the cooperative PSD in Nuremberg - after all, you get a high 0.05 percent interest on the checking account . In addition, you do not pay any account management fees.

In the long term, no good idea to leave money on the checking account

In the current interest rate you would receive 150 euros interest at the end of the year and find 30,150 euros on the checking account. After all, you could think. However, one should not forget the current inflation that simply makes the money lose value.

A current estimate by the Bundesbank predicts an inflation of 7.1 percent for 2022. If one calculates inflation, the so -called purchasing power of 30,150 euros at the end of the year is only 28,024.43 euros. In the current situation,

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is difficult to predict how interest and inflation could develop. However, experts assume that interest rates will be further increased. If you assume that interest rates in the checking account grow to 1.0 percent in 2023, at the end of the next year you would have 30,451 euros.

But even for 2023, the Bundesbank predicts a high inflation, it assumes 4.5 percent inflation next year. This would drop the value of the assets in 2023 to 27,043.16 euros - despite the interest.

So it doesn't seem to be a good idea to simply leave your money on the checking account. But what do you do instead? A look at other investment products shows that it will also be difficult to beat the current inflation, but the return is often higher than the checking account.

fixed money and ETF savings plans with a significantly higher return

On the one hand, the interest turnaround increases the interest for daily and fixed money. If you want to liquidate your money quickly and are willing to store it on a call money account at a European bank, you can currently collect up to 0.35 percent interest per year.

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For fixed money, to which you cannot access a specified period, you get even higher interest rates. If you can do without a fixed amount for five years, you can expect up to 2.0 percent interest.

but also an ETF savings plan should be considered. Due to the consequences of the Corona pandemic and the attack of Russia on Ukraine, the courses on the stock exchange broke in at short notice, but for example, the course of the MSCI World ETF has increased by 1.1 percent over a year. The increase in value over three years was even over 30 percent.


Video: End of negative interest rates on the account - First banks PRESCHEN (dpa AFX)

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