The ING Bank has increased the interest rate for call money to three percent. She got the industry excited.
Oliver Maier, Managing Director of the comparison portal Verivox, said: Savers would not currently receive such high overnight interest rates as at ING at any other German bank.
Business Insider asked five banks how they are responding. Commerzbank announced that it would decide on further rate hikes in April.
ING has excited the industry. The reason: On Wednesday, the bank announced in a press release that it would pay three percent interest on new overnight deposits for six months. For both existing and new customers. After that, the base interest rate of 0.6 percent should apply again.
Why are banks paying interest again now?
Since the interest rate turnaround by the European Central Bank (ECB) in July, banks no longer have to pay interest when they park money at the central bank, but instead make money from it. Therefore, money houses attract new customers, because money can be made with new deposits. Existing customers also get interest on call money again from many banks and savings banks, but usually less than new customers.
The announcement was a declaration of war. After all, the online broker Scalable Capital has been considered a pioneer when it comes to interest rates. He pays 2.3 percent interest on call money, but indefinitely – and not limited to six months.
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Oliver Maier, Managing Director of the comparison portal Verivox, told the German press agency: savers would not currently receive such high overnight interest rates as at ING from any other German bank. According to Maier’s assessment, the new offer should further heat up the competition for savings.
“Especially savers who are willing to shift their money occasionally can benefit from such promotional offers. As soon as the promotional interest expires, they simply switch to the next bank with a special offer for new customers,” said Maier.
Business Insider asked four banks and brokers how they’re reacting to a competitor’s rate hike.
Commerzbank is planning further interest rate adjustments for call money
Die Commerzbank announced that she was planning further interest rate adjustments for the call money accounts of Commerzbank and the online bank Comdirect for mid-April. The bank currently pays 0.4 percent per year or 0.5 percent at the Comdirect.
There Online Broker Trade Republic, who was the first in Germany to raise call money rates to two percent, is not impressed by the competition. “Existing customers do not benefit or only for additional funds paid in,” says a spokesman for ING. “We don’t make these kinds of bait offers at Trade Republic.” It is important to them to make all customers a fair offer. The spokesman said nothing about a possible increase in interest rates.
Deutsche Bank:
Die Deutsche Bank stresses that she increased the interest rate on her call money to 0.40 percent per year as of April 1st. However, the bank remains open to raising interest rates. A spokeswoman told Business Insider, “We continue to monitor developments in the interest rate markets and will adjust the interest rate in due course.”
Die postal bank also points out that they have raised overnight interest rates to 0.40 percent per year as of April 3.
When in doubt, consumers have to weigh up which offer can save them the most.