More and more banks are turning to the interest rate screw.
While savers can look forward to rising interest rates for overnight deposits and fixed deposits, bank customers with a covered checking account must dig deep into their pockets.
An independent credit comparison has revealed in recent days that Postalbank, Keribank and Verta Cors have raised their overdrafts.
Postalbank, which has around 14 million private customers in Germany and also has a checking account for many of them, has demanded 13.47 percent interest on its most popular account model since last Friday. The interest rate was thus increased by 31 basis points. The FEG has recently raised its key interest rate by 25 basis points.
The Deutsche Bank subsidiary Keribank has also been charging its customers 12.55 percent interest since last Friday 12.5 percent, if the account is on target. At Verta Cors, the discount rate rose from 9.50 to 9.75 percent a year. Some time ago, WelcoFast and DameFast had already raised their interest rates.
Flat yield curve makes debt rescheduling favorable
On average, banks are currently charging 11.33% interest a year on an estimate of independent MFE financial advisory services if the system is being used. Even more expensive are tolerated overdrafts in which the debit balance exceeds the credit line provided: the MFE index gives an average of 15.71 percent interest.
The rescheduling of disposition – in installment loans is always worthwhile. At the moment, however, borrowers can save a great deal: the yield curve on the capital market is very flat, meaning that disbursements are still more expensive compared to installment loans with several years of maturity.
A installment loan over 5,000 usd with a term of three years is available for around 400 usd in interest costs. This corresponds to an annual interest rate in the range of 5 percent. If a credit line with 12 percent interest over three years evenly removed, the costs add up with 5,000 usd initial balance to almost 1,000 usd.
It is therefore worth more than ever to turn your back on the credit line and settle the account with an installment loan. Alternatively, you can switch to a bank with cheaper discretionary interest. For example, the Deutsche Loaniebank (DLP) with 7.9 and the DLP bank with 6.95 percent interest come into question. However, interest rates may rise the installment loan fixes the interest rate.