Interest rates are rising: fixed-term deposits more attractive, installment loans more expensive

high interest rates
Fixed-term deposits are more attractive, and installment loans are more expensive

Since spring, interest rates have known only one direction: upwards. The classic saving system in particular is becoming more and more popular among consumers again. On the other hand, borrowing money becomes more expensive.

Interest rates have been very dynamic for weeks. And with it the interest on overnight and time deposits, which brings back classic savings. But interest rates on consumer credit are also rising, affecting investments.

Daily and fixed deposit accounts

According to Check24 spokesperson Edgar Kirk, traditional investments such as overnight deposit accounts and term deposit accounts will become more attractive in light of the trend in interest rates. The first banks raised interest rates, especially in the short term, but also in the medium term. A dynamic that, from the point of view of the comparison portal, can accelerate throughout the year. Means: 2 percent and more interest on a two-year fixed deposit is possible.

So consumers can use what’s called a tray strategy, according to advice from a Check24 spokesperson. If you want to save, you don’t put all your savings into one fixed-term deposit account, but divide it into several accounts with different maturities. This creates flexibility.

An overview by Stiftung Warentest makes it concrete. With tonight’s money, consumers currently receive interest of up to 0.25 percent per annum, with fixed-term deposits ranging from 1.30 percent (one-year fixed deposit) to 1.70 percent (three-year fixed-term deposit).

The best fixed deposit accounts in comparison.

Installment Loans

At the same time, interest rates on consumer loans are rising. According to Kirk, these are up 20 percent since then, with nearly all banks adjusting their funding offerings in recent months. This means a temporary end to historically low lending rates, according to a Check24 spokesperson.

Here, too, a look at the current figures from Stiftung Warentest helps. Accordingly, for installment loans, the range of fluctuation in interest rates is between 1.89 and 6.70 percent. According to Check24, many consumers are already submitting their investment. Because for the additional cycle of the year, the comparison portal expects average effective interest rates of up to 5 percent. So it can be helpful to make important and big purchases.

But not all banks raise interest rates to the same extent. Thus the interest rate differentials can become larger, which is why a loan comparison can be worthwhile, according to Stiftung Warentest advice.

The best installment loans in comparison.

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