How much money do you have to invest?

It’s worth saving again. Because the European Central Bank (ECB) has initiated the turnaround in interest rates by raising the key interest rate. That’s why many banks lure you with lucrative returns: be it on a fixed-term deposit or call money account. But how much money would you have to invest to get 1,000 euros in interest?

After the European Central Bank (ECB) turnaround in interest rates initiated, more and more banks are also increasing their interest rates. Ultimately, more and more savers are benefiting from this. Because there are lucrative returns on many call money and fixed-term deposit accounts.

Saving: This is how you collect 1,000 euros in interest per year

The reason: The key interest rate is currently 3.5 percent. In addition to many banks, some neo-brokers have therefore also jumped on the interest train. Trade Republic is currently attracting interest rates of around two percent. At the competitor Scalable Capital it is even 2.3 percent – but only for subscribers of the Plus subscription.

ING Germany even promises three percent overnight interest, but only for six months. With the corresponding follow-up interest, the bottom line is an effective annual interest rate of 1.8 percent. Nevertheless, it is worth saving again.

However, you should not leave your money in the checking account, as this is usually interest-free. With a call money or time deposit account, however, the situation is different.

Call money account vs. time deposit account: the difference

Ideally, monthly salary will flow into your checking account. But it’s even better if there’s some left over at the end of the month. A so-called nest egg can undoubtedly do no harm. But above a certain amount it is worth rethinking.

Suppose you have 10,000 euros in savings in your checking account and want to put this amount aside as a nest egg. Then a money market account is an ideal option. Because even in emergencies, you can access the money within one working day.

At the same time, there is less temptation to spend the savings unnecessarily if it is in another account. According to a rule of thumb, you should set aside two to three net salaries as a nest egg. A fixed-term deposit account is currently also a worthwhile alternative or supplement.

Because German banks now pay up to three percent interest on fixed deposits – the European ones even up to 3.5 percent. The catch: With a fixed-term deposit account, you entrust your money to the bank for a limited period of time. Only then do you get the interest. During this period, however, you cannot access your money – the returns are higher.

1,000 euros interest per year: A sample calculation

Suppose you want to invest your savings in a fixed-term deposit account for two years. Then you can get up to 3.5 percent interest at some European banks. In order to earn 1,000 euros in interest per year, you would have to invest 28,572 euros. In the second year you would again benefit from the compound interest and collect 1,035 euros.

With a call money account, however, the bill looks a little different. The ideal interest rate is 2.5 percent. In order to collect a return of 1,000 euros at such an interest rate, you would have to invest around 40,000 euros. The advantage: Some banks and brokers even pay out the interest monthly or quarterly.

Ultimately, however, whether an overnight or fixed-term deposit account is suitable for you depends on whether you can do without the money for a certain period of time or whether you want to put it aside as a nest egg. A mixed system may also be an option.

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