Interest on overnight money is back: the first major bank rewards savers
The turnaround in interest rates is well received by savers: a first large bank in Germany has decided to pay at least 1 percent interest on call money. But that’s just the beginning, because call money rates are “here to stay”. However, it is still important to look at the fine print.
ING offers 1 percent overnight interest
After the European Central Bank initiated a turnaround in interest rates, the first large German bank is now following suit with a concrete offer for savers. The direct bank ING is now offering all new customers one Interest rate of 1 percent for the call money – but only for a period of four months (source: ING Germany on Twitter).
Irrespective of whether prospective customers are already customers of ING or not, the next step will then take place on December 6, 2022. From then on, 0.3 percent interest is due for the overnight money “without conditions”. A modest interest rate that will not make a significant difference in times of near double-digit inflation. According to ING Germany boss Nick Jue, this is just the beginning. The days of zero interest rates are over and overnight interest rates for the bank’s almost 9.1 million private customers are “here to stay”.
According to the portal biallo.de, the average overnight interest rate in Germany on July 1, 2022 it was still 0.05 percent, meanwhile it has risen to 0.31 percent. With a fixed-term deposit invested for one year, customers can now expect an average of 0.87 instead of 0.25 percent previously.
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Call money is making a comeback
Not only at ING, but also at other banks, interest on overnight money is slowly making a comeback. Renault Bank Direct from France just got their offer increased to 0.75 percent and promises an interest rate guarantee for three months. In France, too, the European deposit insurance applies for sums of up to 100,000 euros. In the event of bankruptcy, the money remains protected accordingly.
