Compare best demand & savings accounts in Germany in December 2024

What is a savings account?

A savings account is a type of interest-bearing account where you can earn interest while keeping your funds accessible for use. It operates similarly to a checking account, allowing investors to access their funds at any time without fixed terms or notice periods. However, the terms and conditions for savings accounts vary significantly depending on the bank. Many banks offer the option to open a savings account directly online.

Since savings accounts are not designed for day-to-day transactions, you'll need a separate transactional account for deposits and withdrawals. Typically, your existing checking account at your primary bank suffices for this purpose. To utilize the balance in your savings account, you'll need to transfer funds to the reference account.

Who should consider opening a savings account?

A savings account is primarily suitable for individuals looking to set aside funds for short-term expenses while also earning interest. It provides a safety net for emergencies where a larger sum of money is unexpectedly needed, such as for an unplanned move, car repairs, or loss of employment. Additionally, a savings account is beneficial if you're planning a major purchase in the near future, like buying a car.

Savings accounts versus other investment options

While a savings account is ideal for keeping readily available funds, it's not advisable to leave too much money permanently in the account due to the continuous loss of value caused by high inflation rates. As a general guideline, it's recommended to maintain approximately three net monthly salaries as a liquid reserve in your savings account. For further information, you can refer to the provided link. The remainder of your savings should be invested in options offering higher return prospects, such as a combination of fixed deposits and ETFs.

Fixed deposits typically offer higher interest rates but entail less flexibility in managing liquidity. Unlike savings accounts where interest rates can fluctuate daily, fixed deposits lock in the interest rate for a specific term. During this period, access to your funds is limited, but in exchange, banks usually offer significantly higher interest rates, especially for longer terms. Savings accounts are particularly suitable for short-term investments. For instance, if you're planning a major purchase in six months, you can open a savings account for that duration and earn interest on your money. However, if you can afford to do without your savings for two or three years, a fixed deposit investment may be a viable option. You can explore various offers using a fixed deposit calculator.

Savings accounts and fixed deposits interest rates in 12/2024 in Germany

• Savings accounts
• Short term fixed deposits
• Fixed deposits for 1 year term
• Fixed deposits for 2 years term
• Fixed deposits for 3 years term

What to consider when comparing Savings account accounts

Deposit insurance

For banks in Germany and all across EEA, there's a minimum statutory deposit insurance of 100,000 euros per customer per bank (or equivalent in local currency). Savings accounts are covered by deposit guarantee protection schemes.

What type of saver are you?

When comparing Savings account accounts, savers should consider whether they are looking for a permanent Savings account interest rate or if they want to regularly open a new account to take advantage of limited-time offers.

Shopping around for interest rates brings higher returns

Often, opening a particularly high-interest Savings account account pays off doubly. Many banks sweeten the deal for switching by offering a bonus. Others grant new customers particularly attractive interest rates for a few months. Agile investors can take advantage of such special conditions and regularly switch their Savings account provider whenever a promotional interest rate ends (interest rate shopping). If you prefer not to switch Savings account accounts too often, you should look for a bank with a consistently high or stable interest rate for existing customers after the promotional period expires.

Shifting your money to the current top offer can increase your returns. However, this interest rate shopping requires some effort. Regular comparison and switching are more worthwhile for investors who can invest some time in managing their Savings account accounts.

There are many banking products comparison resources in various european countries, for instance Verivox and Finanztip in Germany, Seguggio and Sostariffe in Italy, elEconomista in Spain, and Independer in the Netherlands.

However, PickTheBank is the only financial marketplace comparing savings products all across EU.

Regularly compare and switch interest rates

When transferring your Savings account to another bank to benefit again from new customer conditions, make sure to completely close the bank connection with the previous provider. You should not only cancel the investment but also any checking account and other products from the bank. By doing so, you can become a new customer again after one year and enjoy high Savings account interest rates. This way, your money is always invested at the best current conditions. However, you'll need to go through the account opening formalities anew each time.

Investment amount

For some banks, the possible investment amount is unlimited. Others set a maximum and minimum deposit or tier their Savings account interest rates.