NEven a year ago it was highly attractive for private investors to buy short-term German government bonds. The risk of a debtor defaulting in such a short period of time is negligible and for two years of lending money to the German state there was an interest rate of 3.2 percent per year. Investing is always a question of alternatives and they looked poor for security-oriented investors. Only a few banks passed on to customers the higher interest rates they received from the European Central Bank (ECB) on their deposits. The fact that the neobroker Trade Republic announced a year ago that it would pay its existing customers 2 percent interest on deposits was a sensation. FMH Finanzberatung determined an average interest rate for overnight money of 0.8 percent.
A year later the world looks different. The banks have gradually increased their interest rates for existing customers, and so in most cases there is at least 1 percent for overnight money (if not, please urgently take the money to another bank). The average is even 2 percent and if you search a little you will also find offers at 4 percent. Fixed-term deposits for one year have an average interest rate of 3 percent. But the federal bond only yields 2.6 percent for two years.
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