“The negative interest rates were at least honest” | THE INVESTMENT

How nice were the days when you were still allowed to pay negative interest on money parked in your checking or demand account. What tasteful terms the banks had devised to pass the negative deposit rate. Formulations such as “custody rate”, “arrears interest” or “passage of negative interest on deposit” were fashionable. As a saver, he wishes he could go back to that time. Now you may rightly wonder why.

After all, we have seen dozens of interest rate hikes by central banks around the world in recent months, and the trend is pretty much the same everywhere: interest rates are rising. And the first banks and insurance companies once again offer generous interest rates for short- and medium-term deposits through savings accounts or call money. Even the home saver who was declared dead is experiencing a renaissance as interest rates rise like a phoenix from the ashes. So if there’s one group that shouldn’t be bothered by rising interest rates, it’s savers.

However, I maintain my thesis that the time when there was no interest was fairer and more transparent for savers. After all, the interest on deposits now available is no coincidence. Without the huge inflation in Europe and the Western world, central banks, like the ECB, would not have seen the need to let interest rates rise. But now that the annual depreciation of purchasing power in Europe is in the double-digit range and we are now experiencing unprecedented inflation, the guardians of price stability are in demand.

Where we are?

Let’s briefly review the last few months. At the beginning of the year, the evolution of consumer and producer prices was dismissed as a temporary phenomenon, only to be faced with complete surprise a few weeks later. The ECB now also agreed: inflation was here to stay, at least in the medium term.

In addition to many additional tasks that Ms Lagarde has taken on in recent months (climate protector, linguist), she has lost sight of the overall goal for which she was elected to the position, namely price stability with an inflation rate of around 2 Percent to maintain permanently.

He looked frantically at the United States, where the central bank there, the Federal Reserve (Fed), has already allowed interest rates to rise sharply. A brave move, because the US economy, as has been shown in the past, is definitely more volatile than the European economy when it comes to changes in financial policy. The logical consequence was that the ECB also had to let interest rates rise in order to control creeping inflation. By their standards, the respective interest rate increases were even relatively high and in a short time interval.

So there they are: positive interest rates

As described in the introduction, there are now positive deposit rates for people who can actually save some money in the current phase of high prices. But here I come to the first point. Significantly fewer fellow citizens now enjoy the positive interest rate than would have been the case a year or two ago.

Vastly increased costs of living, energy costs that drive many players to the brink of existence, and extremely high prepayments ensure that liquidity for businesses and individuals is simply no longer available. According to current studies of the Savings Banks, 60 percent of customers no longer have capital at the end of the month, and 30 percent now have to go regularly to the overdraft line. And leading economists warn: We have only seen the tip of the iceberg. Good for all those who have the opportunity to save money even in these difficult times.

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