This is how you get the most out of your money

The European Central Bank (ECB) initiated the turnaround in interest rates with the gradual increase in the key interest rate. Since then, more and more banks have jumped on the interest rate train and lured in with supposedly lucrative returns. But you should take a closer look, especially when it comes to overnight interest rates.

Most checking accounts are still interest-free. But with many money market or time deposit accounts, things are now looking different again. Because with the change in the key interest rate, the European Central Bank (ECB) has gradually turnaround in interest rates initiated. The key interest rate is currently even at 3.5 percent.

Many banks and neo-brokers are therefore tempting again with lucrative interest rates. If you want to benefit from this, you should not leave your savings on the checking account. However, it is worth taking a closer look, especially when it comes to overnight interest rates. Because the offers of the banks not only differ significantly from time to time. There are also some pitfalls.

Overnight interest: You should pay attention to this

ING Germany, for example, recently made headlines. Some newspapers headlined “interest rate hammer” or “interest rate cracker”. The reason: ING has recently been advertising overnight interest rates of three percent. The bottom line, however, is “only” interest in the amount of 1.8 percent.

The offer is valid for a limited period of six months. Then the currently valid base interest rate, which is currently 0.6 percent, applies. So the bottom line is an overnight interest rate of 1.8 percent per year, which is a higher average in comparison.

Call money account: minimum deposit and maximum deposit

The situation is similar for many other banks. They promise supposedly high interest rates, but only for a limited term. Another important aspect: the amount of the deposit. For example, some banks, such as Advanzia, require a minimum deposit of EUR 5,000. There is no interest on amounts below this.

However, a minimum deposit is rarely the case. A maximum deposit, which can sometimes vary significantly, is much more common. At ING, this is currently around 50,000 euros.

There is no interest on amounts above this. In most cases, the maximum deposit with most banks is currently between 50,000 euros and one million euros – at different interest rates.

Overnight interest only for new customers?

Another pitfall when it comes to overnight interest rates: Some banks lure you with high interest rates. The offers are often only valid for new customers. Existing customers either get nothing or receive lower interest rates. The goal: to attract additional capital and new customers.

The Neobroker Scalable Capital, for example, currently offers a relatively high interest rate of 2.3 percent per year – and even without a limited term. However, the offer is currently only valid for customers who have taken out a paid “Prime Plus” subscription.

The goal should be clear: win new subscribers and tie up additional capital. Things are a bit different with competitor Trade Republic. The overnight interest rates are somewhat lower at 2.0 percent. However, the interest rate applies to both new and existing customers. The Neo broker also promises monthly payouts.

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