Interest-free happy. Banks earn anyway.

Times are not the best for investors. Although stocks are still doing quite well at the moment and have almost had something of a rally, the majority of Germans have withdrawn from stock market activity. Due to the bankruptcies on the “Neuer Markt”, prices that went up as quickly as they went down, a “people’s share“, like Telekom, which cost many investors a lot of money or bubble companies, like EM.TV, the record money destroyer, a great deal of trust has been gambled away.

Nothing is more important to the Germans than security. Even when this apparent security comes at the expense of returns. Therefore, the money is invested in low-yield but expensive life insurance policies or brought in masses to the good old house bank. There it sours on savings books (yes, they still exist), savings bonds, time deposit accounts and call money accounts.

Low interest rates

But the times are actually very bad for these investment opportunities, because the interest that customers get for their savings tends to zero. The key interest rate of the European Central Bank is at the moment historically low 0.15 percent (since 04.09.2014 only 0,05 %) and on it the banks and savings banks orient themselves. The Hamburger Sparkasse pays only 0.2 percent interest on call money, the Münchner Bank 0.1 percent and the Sparkasse Allgäu only a paltry 0.05 percent. There the way to the savings bank costs already more than the interest ever will bring in.

Money bills

If one considers these low interest rates also still before the background of the inflation, then the customers should keep their money better in the savings sock. Then they will be able to get their money more easily if the euro crisis, which despite reports to the contrary from the government camp is far from over, should lead to bank closures and the dreaded bank run in this country, as in Cyprus and Bulgaria.

Credit unions are being overrun

Savers could still achieve somewhat higher interest rates if they absolutely wanted to park their money in overnight deposit accounts. the VW bank for new customers nevertheless 1,4 per cent, but the Germans are anxious and run over therefore mainly the people and Raiffeisen banks and savings banks with their money. These can not believe their luck and earn from it magnificently.

Customer deposits at savings banks rose by 2 percent in 2013 to 816 billion euros. And of all things, low-interest call money now accounts for half of all deposits. Actually hard to believe.
That’s why the money houses continue to earn very well despite the low interest rate. As a result, the interest income of the Volksbanken and Raiffeisenbanken actually increased in 2013, by 2 percent to 20 billion euros. This makes the Volks- und Raiffeisenbanken one of the most profitable banking groups in Europe.

And all this only, because the Germans are so uncertain that they make around shares and stock exchanges a gigantic circle and avoid all other banks beside the house bank. Only the good old people and Raiffeisenbanken and savings banks they trust still and flood these with their money. The fact that they get for it practically no more interest, is them obviously indifferent. Hauptsache “sicher”.

Absolute security does not exist

On the promise of the Chancellor, which already at the beginning of the financial crisis a Bestandsschutz for all money deposits with German banks pronounced, should not rely the savers however. Because this suggested absolute security of the so-called “Deposit Protection Fund” does not exist.