What is an e-savings account
Little interest for the classic
Expert for banking and credit as of February 29, 2016
Josefine Lietzau is an editor in the Bank & Investments team. During her studies in German and English, she worked for the editorial offices of the Green League, the Jüdische Zeitung and the Superillu. After completing her master's degree, Josefine Lietzau completed an internship at the online consumer portals Banktip and Posttip, where she then worked as an editor.
- The savings book is one of the oldest financial investments in Germany.
- As a rule, however, the interest on them is no longer lucrative.
- A call money account is the better choice for short-term investments.
As a present from grandparents, godmothers or for communion: for many German citizens, saving did not begin with their first salary, but rather with their savings account when they were children. The savings book has existed for more than 200 years, making it one of the oldest financial investments in Germany. In 1818, Berliner Sparkasse was one of the first banks to pay interest on savings investments. Interest at that time was 4.16 percent. The concept of the savings account first appeared in the 1830s.
According to a Forsa study from 2015, every second German citizen (52 percent) has a savings account, and the trend is rising. The savings book is thus the front runner among financial investments, even just ahead of life or private pension insurance, which are at 50 percent.
What is a savings account?
The savings book works like a normal account, but with restrictions. Traditionally it is an actual book in which the bank records deposits and withdrawals. With newer savings books, the banks have replaced the book with a bank card, with which customers can also withdraw money. Old savings books in book form remain valid.
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Save even the smallest amounts
The good thing about the savings book is that you can save even the smallest amounts of money in the account. The minimum deposits are mostly in the cent or lower euro range. Especially for children, a savings account can be the first step towards dealing with money independently. However, even at a very young age there are alternatives to the savings account that also earn better interest.
Low interest rates and long notice
Despite its history, the savings account has two major disadvantages. In times of low interest rates for overnight and fixed-term deposits, the balance on the savings book also bears little or no interest. In a Finanztip sample in February 2016, the values were between 0.01 and 0.1 percent. For comparison: On a good overnight money account, customers received up to 1 percent at the time - i.e. at least ten times more interest.
The other big problem is the notice period. You can withdraw up to 2,000 euros per month from your savings account - but not more. If you want to withdraw more money, you have to cancel the savings account. The usual deadline is between three and six months. You won't get the full amount beforehand.
What to do with the money
If you are one of the millions of Germans who still have a savings account, you can cancel it. If you would like to have the money at short notice, we recommend a call money account. You receive more interest on it than with the savings account and can still clear away the money at any time.
Another alternative is a fixed deposit account. Depending on the term, the interest rates are higher than the overnight money offers. However, your money is not available in this account over the term, it is fixed with the bank.
For long-term investments between 10 and 15 years, we recommend investing part of the money in stocks, depending on your risk appetite. Only invest the money that you certainly do not need over the term.
If you still have a savings account, you should cancel it. With other investments there is more interest. You can find out how to best invest in our investment guide.
More on this in the daily money guide
- Call money accounts that offer good interest rates in a safe bank are recommended.
Our provider recommendation: Bank of Scotland, Advanzia Bank, Bank 11, Leaseplan Bank, Klarna über Weltsparen, Sberbank Direct, TF Bank
To the advisor
More on this in the fixed-term deposit guide
- Fixed-term deposit offers that offer good interest rates from a safe bank are recommended.
Our provider recommendation: Klarna, Leaseplan Bank, Resurs Bank over Weltsparen
To the advisor
Eric Brandmayer volunteered at Finanztip. Until January 2017, as an editor in the insurance team, he was mainly responsible for the topics of household effects and liability. He previously gained practical experience in various editorial offices and in the press office of the German Olympic Sports Confederation.
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