Dhe new year 2021 should, according to everything that can be foreseen so far, be characterized by a certain economic recovery from the corona crisis. But what does this mean for the interest that consumers have to pay on loans or that they get for their savings? Unfortunately, all forecasts suggest that it is above all interest rates that consumers will have to pay that could rise in the new year. Most of the interest they get from banks, on the other hand, should remain at a very low level. So the bottom line is not good news for consumers.
In any case, Max Herbst from FMH Finanzberatung in Frankfurt thinks that construction rates in Germany could rise by 0.5 percentage points as the economy recovers. That doesn’t sound like much, but it would be quite a lot: At the moment, consumers in Germany are paying an average of 0.66 percent interest on building loans with a ten-year term. If this interest rate were to rise to more than 1 percent in the course of 2021, as Herbst believes it possible, building interest would be reached, as it had last been in early 2019. “Such a rise in interest rates would be quite remarkable,” says Herbst.
It looks worse with savings interest. In the past few weeks there have been offers from individual banks that wanted to pay a little more for what they saved. Some were already speculating on a turnaround in interest rates, including for savings rates. The Swedish payment provider Klarna, for example, currently offers 0.85 percent for fixed-term deposits for one year. But these are more like “outliers”, says Herbst. The next worst provider is currently paying more than a third less interest. In any case, a turnaround in savings interest is currently not in sight. Automobile banks or other banks, which are known primarily for granting loans, are only allowed to offer a little more for savings in the short term if they want to collect money quickly.
The interest rates for installment loans, however, could rise somewhat in the new year. However, especially if the banks have to contend with many loan defaults as a result of the pandemic. With installment loans there is often little collateral. If the loan for a new wall unit fails, it makes little sense for the bank to dismantle the wall unit and recycle it. Such unsecured loans are often more expensive in times of high defaults – even if the interest rate is currently not particularly low at around 4 percent on average. Experts recently pointed out several times that there are currently attractive margins for banks in this business.
The number of banks charging negative interest rates on overnight money accounts is likely to increase further in the coming year. The Biallo Internet portal points this out. This year alone, around 200 banks and savings banks introduced negative interest rates for private customers. Biallo reports that this number has increased almost ninefold since mid-2019. In the meantime, 260 institutes have received negative interest rates in the private customer sector, while there are a good 330 institutes for corporate customers. The threshold above which negative interest would become due will in future be 100,000 euros for many institutes, says Herbst: “It may even be that the banks reduce them to 50,000 euros if they want to encourage their customers to switch to other products invest, for which they get more commission. ”Most recently, the Commerzbank subsidiary Comdirect lowered its negative interest threshold for new accounts from 250,000 to 100,000 euros, previously the direct banks ING and DKB had introduced such a limit. From February onwards, the Comdirect’s new negative interest threshold will also apply to existing customers who set up their customer connections between January 17th and December 13th of this year.