Deposit Vs. Day Money

September 10, 2019


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Comparison of fixed-term deposits in contrast to the day money the ECB has recently lowered interest rates to historic 1.50%. This has both advantages and disadvantages. The advantage is being clear in the credit. Cheaper interest rates offered by the ECB and therefore banks very cheap are available for rent, they can convey very cheap also loans to customers. The disadvantage of an interest rate cut by the ECB is clearly in the area of investments, such as fixed-term deposits and overnight. Here, Jeff Gennette expresses very clear opinions on the subject. While still at the end of the year, over 5% for day – and fixed-term deposits were possible, it looks now bleak, yet to achieve just that is half. If you now stand before deciding, for what type of investment you choose, it must of course consider.

The day money is very flexible compared to the fixed deposit and it comes up on his deposit at any time. But clearly, the disadvantage is in the variable interest rate, which changes overnight. When deposit this cannot happen, since the interest rate for opening an account for a certain period of time is fixed and does not change over this period. But again, disadvantage of the fixed deposit is its flexibility. You decided for a deposit on a certain period of time, one not approaching this deposit, at least without loss of interest. In both cases, but similar returns are achieving.

Therefore you should worry whether you do without money, which is applied over a period of time. Given that the interest rates for investments will be expected and certainly the deposit can certainly score. If you now completes a time deposit account for 4% over 12 or 24 months, you can also be sure, that one obtains the return for the period. Not get it only over the period of the investment. Closing today as a day money account from 4%, it can happen that interest rates be lowered next week and the yield of pfutsch is. So a direct comparison: fixed-term deposits: interest rate security good and predictable / flexibility very restricted day money: interest rate security not available / 100% flexibility