Business Insider.de : 3 percent on the money market account, almost four on the fixed deposit: Which banks offer the highest interest rates in May.

Business Insider.de : Three percent on the money market account, almost four on the fixed deposit: Which banks offer the highest interest rates in May. The era of interest rate hikes is not yet over. Again, this month, the European Central Bank has raised interest rates. The consequence: banks are following suit and are vying for your deposits with ever better offers for day-to-day and fixed-term accounts.

Meanwhile, even with daily money, more than three percent interest is possible. However, those who invest their money firmly can pocket even higher interest rates. Verivox has evaluated for Business Insider which banks pay the highest interest rates for one- and two-year fixed-term deposits, as well as daily money.

“The interest rate rally is gaining more and more momentum”

Oliver Maier, managing director of Verivox Finanzvergleich GmbH, says: “The interest rate rally is gaining more and more momentum, and the recent ECB key interest rate increase will further fuel competition.” The banks themselves would now pocket a hefty 3.25 percent interest when they deposit their customers’ savings with the central bank. “The fact that more than a third of all savings banks and cooperative banks do not pay any day-to-day interest seems out of date against this background.”

A full 3.3 percent interest is available in Germany at the market peak for two-year fixed-term deposits. The Akf Bank is therefore the bank in Germany with the highest interest rates for two-year fixed deposits.

However, you can get even higher interest rates if you invest your money with banks abroad in Europe. Here, several banks offer 3.85 percent. “If you invest 10,000 euros at these conditions, you will receive a total of 785 euros in interest over the full term,” Maier calculates.

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Deposit insurance also applies abroad in Europe

You only need to worry to a limited extent about investing your money abroad. In the event of a bank’s bankruptcy, the European deposit insurance covers up to 100,000 euros.

If you want to invest your money for a shorter period, you have to expect slightly lower interest rates. Nevertheless: The interest rates for one-year fixed deposits are again respectable. Akbank pays 3.05 percent. Another seven banks pay 3.0 percent and thus only slightly less.

As with two-year fixed-term deposits, however, it also applies here that European banks pay even higher interest rates. A proud 3.7 percent is currently available from the TBI Bank in Bulgaria.

There is a surprise in the day-to-day money offers. The best interest rate on the overall European market is offered by two banks – one of them comes from Germany.

BMW Bank pays 3.0 percent interest on the day-to-day account

BMW Bank recently announced that it would pay its customers 3.0 percent interest. This applies to deposits of up to 50,000 euros. Any additional euro is paid at 0.6 percent interest.

You’re wondering what fixed-term and day-to-day money actually are and what advantages and disadvantages there are? We have summarized the most important questions and answers about savings deposits at banks for you here.

What is a money market account?

Two to three net salaries should be kept as a kind of emergency fund to cushion financial surprises. But where is the best place to keep your savings? The answer: In a money market account.

The money market account offers a kind of secondary account alongside the checking account – but with interest. Here you can build interest-bearing reserves, but can transfer money to your main account within a day.

What are the advantages of a money market account?

Storing money in a money market account makes sense from several points of view. On one hand, you can quickly transfer money to your main account, on the other hand, you won’t constantly be tempted to spend your savings.

Furthermore, your assets in the money market account are protected up to 100,000 euros by deposit insurance. This applies to all European and German banks.

What are the disadvantages of investing in a money market account?

The interest rates for the money market account are not very high at all banks due to the higher liquidity. Especially savings banks and cooperative banks do not always pass on the interest to their customers. Therefore, it may be necessary to open an account with another bank in addition to the main bank.

A money market account alone is not sufficient as a form of investment. This is because: the interest rates for time deposits are much higher. So, once you’ve saved up your emergency fund, you should invest the excess money as a time deposit.

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How can I invest in a money market account?

In order to be able to invest money market, you need a money market account with the chosen bank. This can be opened online with most banks. Identification is then done via video call. Some banks require you to open a checking account in addition to the money market account.

What is a fixed deposit?

A fixed deposit is a form of investment with a bank. You deposit a certain amount of money with the bank for a predetermined period of time and receive fixed annual interest in return.

You can decide how long you want to deposit the money. Typical investment periods are six, twelve or twenty-four months. But several years are also possible. The longer you deposit the money, the higher the interest rates usually are. However, the further interest rate development… (The text is cut off here.)

It’s difficult to predict, so you should generally avoid terms over three years.

What are the advantages of a fixed deposit?

Fixed deposit is considered a very safe type of investment. This is because: up to 100,000 euros are covered by deposit protection at German and European banks. If your bank goes bankrupt, you will get up to 100,000 euros back. If you have more than 100,000 euros in savings, you can distribute the money across various banks and benefit from deposit protection at each bank.

Another advantage is the high interest rates on fixed deposits that some banks are now offering again. Just a year ago, interest rates of more than three percent for one-year fixed deposits were unthinkable. Also, banks in other European countries often offer higher interest rates.

What are the disadvantages of investing in a fixed deposit?

Compared to a money market account, you cannot access your money with a fixed deposit. It is not available to you for the duration of the agreed term, or only against a very high fee.

This is something you should definitely keep in mind if you want to invest your assets in a fixed deposit account. Therefore, it is not suitable as a reserve for an emergency fund.

How can I invest in a fixed deposit?

To be able to invest in a fixed deposit, you need a fixed deposit account with the chosen bank. Most banks now allow you to open one online. Identification is then carried out via video call.

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