High inflation is destroying the savings deposits of Germans. However, many people still rely on savings accounts. What is the best alternative.
Despite higher inflation rates, most people in Germany continue to invest their money in forms of savings that earn little interest. In a survey commissioned by the Association of German Banks (BdB), 45 percent said they parked money in their savings accounts.
38 percent depends on money at sight or time deposits. The proportions did not change from last year’s survey. Multiple entries were possible.
The above forms of savings pay little or nothing when interest rates are low. More and more institutes now even charge negative interest on demand accounts above a certain amount. According to the survey, one-third (33 percent) of the 1,000 investors surveyed also own stocks, fund shares or other securities. A year earlier it was 31 percent.
Inflation is currently at 7.3 percent, its highest level in 40 years. As a result, the money that savers deposit in interest-free accounts is becoming less valuable. Not least for this reason, experts advise consumers to invest their money in the stock market instead of keeping it in their savings account.
T-online columnist and investment specialist Gerd Kommer also warns: “Your money is at risk in the savings account.” The so-called ETFs, special funds that map entire stock market indices such as the Dax particularly cheaply, are particularly suitable for beginners and thus allow a wide diversification of your risk. Read here why ETFs are such a popular investment. How to invest your money in stocks we explain it here.
Highlights: Similar to savings accounts, you can regularly save in stocks, funds, and ETFs, which generate significantly higher returns than savings accounts. You can read here exactly how such an ETF savings plan works.
According to the BdB, sustainable investments are becoming more and more popular. According to the survey, more than 6 million people in Germany are now investing their money in such funds and shares. Their number has more than doubled since 2019. “Above all, gaps in knowledge and lack of information still prevent many investors from making sustainable investments,” explained BdB CEO Christian Ossig.
Sustainable investments are becoming more popular
According to the information, half of the respondents have heard the term “sustainable investment”. However, about a third of them do not know what exactly is behind it. Ossig still sees “clear room for improvement,” especially among people with lower incomes. “Unfortunately, too often it is still a matter of revenue to invest in ‘green systems’.”
According to the survey, the higher the income, the more investors trust sustainability. One in four people whose monthly net family income exceeds 3,500 euros claims to invest in a “sustainable” way.
Sustainable investments are understood as those investments that include environmental factors, social responsibility and good corporate governance. Last December, the EU set out specific criteria for climate-friendly investments and, despite widespread criticism, proposed that gas and nuclear investments be classified as sustainable financial investments for the time being. Renewable energies are already classified as climate friendly in the classification system called taxonomy.