An overnight money account is the ideal parking space. For money that you will need in the foreseeable future and that you want to keep separate from your current income and expenses.
With an overnight money account, you use the principle “out of sight, out of mind” – in a positive way. Don’t underestimate how powerful this is. If you transfer a fixed amount from your current account to the daily money account every month (preferably by standing order and shortly after receipt of your salary), you will probably not miss the money that much. All the better when the daily money piles up soon.
- A brief look at overnight money accounts
- What is an overnight money account?
- Why should you have overnight money?
- For whom is an overnight money account worthwhile?
- What should Expats in Germany watch out for when comparing overnight money accounts?
- The best online comparison tables for an overnight money account in Germany
- Frequently Asked Questions (FAQ) about overnight money accounts
A brief look at overnight money accounts
- An overnight money account helps you to park money safely. You can withdraw or deposit money at any time.
- Even if there is less interest today than in the past, it is still worth making a comparison.
- A buffer for short term expenses is very important. A call money account is more suitable than your normal checking account.
What is an overnight money account?
An overnight money account (what is referred to as a “Tagesgeld Konto” in Germany) helps you invest a certain amount with interest. As the name suggests, you can access your money at any time.
Why should you have overnight money?
If you want to set aside money for your next car, wedding or annual vacation, you should take advantage of the best offers for daily allowances. Even savers who are currently preparing to buy an apartment or house or move including new furnishings can first deposit their future equity into a call money account. And finally, a certain emergency reserve can be kept on the call money account for repairs or other unexpected expenses.
The overnight money account is less suitable for long-term saving. Because if you leave your bank money for a longer period of time, you have the chance of significantly higher interest rates in other forms of investment. If you assume that interest rates will continue to fall or remain low, you should switch to fixed-term deposit account (what is referred to as a “Festgeldkonto” in Germany) with part of your credit balance . This gives you interest rate security for the selected period.
If you are generally looking for a higher return, it is best to mix secure investments such as overnight money and fixed-term deposits with other forms of investment. Like overnight money, equity funds are available daily, but are subject to price fluctuations. On the other hand, the returns in good years are many times higher than the interest rates on fixed-term and overnight accounts.
Why should Expats in Germany open an overnight money account (Tagesgeld)?
- Overnight money offers significantly higher interest rates than any savings book or checking account.
- Every overnight money offer listed on biallo.de is subject to the statutory deposit protection of 100,000 euros per person.
- You can get your money at any time – every day. How much you want to invest is up to you.
- Call money accounts can be opened and managed easily and conveniently over the Internet. Some banks also offer telephone banking. In most cases, the online account opening takes no more than five to ten minutes. You fill out the application on the Internet. Then go to the nearest post office with the printed application and carry out the so-called Post-Ident procedure there. In order to identify yourself to the postal worker, you need a valid identity card or passport. With some providers, identification is carried out using a video identification process.
For whom is an overnight money account worthwhile?
Overnight money is particularly worthwhile for savers who value security and flexibility. Call money is the right choice if:
- You are looking for a short to medium-term investment,
- want to get your money flexibly at any time,
- do not want to pay an account management fee,
- expect higher interest rates than on a conventional savings account.
What should Expats in Germany watch out for when comparing overnight money accounts?
1. Overnight interest
For many investors, the most important thing is the interest rate. Ideally, it is above inflation so that the value of the overnight money does not decrease indirectly. But: The interest on a call money account is variable. In other words: In contrast to the fixed-term deposit, overnight interest rates can be adjusted daily, so they also rise but also fall. There are interest guarantees for customers only if it is a special offer, such as a new customer offer.
With such promotions, the interest rate is often fixed for a certain period of time. The best overnight money accounts are characterized by stable interest rates. This is precisely why it is worthwhile to keep comparing providers and offers.
2. Investment amount
Only a few banks now require a minimum investment amount from their customers. As a rule, the maximum amount is 100,000 euros. You shouldn’t invest more in a call money account anyway, because the statutory deposit protection applies up to this limit.
3. Statutory deposit insurance in Germany
With a call money investment, you don’t have to worry about your money – at least up to a certain amount. Because all offers in the daily money comparison from biallo.de are completely covered by the statutory deposit protection up to a maximum of 100,000 euros per saver. But you should always keep in mind that the deposit insurance is only as secure as the creditworthiness of the state that guarantees it.
A common European solution does not yet exist. In order to give you a feeling for the quality of the deposit protection of the respective provider, you not only see the country of origin of the provider, but also the corresponding credit rating from Standard & Poor’s.
4. Voluntary deposit insurance in Germany
In addition to the statutory deposit protection, many German financial institutions have another protection. Around 130 private banks belong to the deposit protection fund of the Federal Association of German Banks. For customers, this means protection worth millions. Savings banks as well as Volks- and Raiffeisenbanken support each other so that the deposits are insured practically without limit.
Deposit insurance with foreign banks
Every bank in the euro zone offers its customers a minimum protection of 100,000 euros per person. And depending on where the bank is based, the statutory deposit insurance of that country counts. Examples of this:
- At Renault Bank Direkt, the French statutory deposit insurance takes over.
- At the big bank, the Estonian state guarantees customer funds in an emergency.
- The overnight money at Advanzia Bank is subject to the statutory deposit protection of the Grand Duchy of Luxembourg.
- VTB Bank is part of the Austrian deposit insurance scheme.
- The Südtiroler Sparkasse refers to the deposit insurance in Italy.
The provisions of the Banking Union stipulate that savers should be given access to their credit balances within 15 days of the occurrence of the compensation event. This provision of deposit protection will be even more consumer-friendly, because this period is to be shortened to seven days by 2024. These regulations apply to overnight money as well as to fixed-term deposits, savings bonds or credit balances on current accounts.
The best online comparison tables for an overnight money account in Germany
How to use the comparison table
Simply fill in these options:
- Investment amount (Anlagebetrag)
- Investment period (Anlagedauer)
- Deposit insurance (Einlagensicherung)
Results of the comparison
You will get the best 4 overnight money accounts in Germany
- + The 3rd column tells you if the amount in insured in Germany
- + The 4th column tells you the Return
- + The 5th column tells you the field
Frequently Asked Questions (FAQ) about overnight money accounts
Why do I even need an overnight money account?
Overnight money accounts earn better interest on average than current accounts and savings books. Another plus: you can transfer money that is in a call money account back to your current account at short notice. With a savings account, on the other hand, you may have three months’ notice before the last cent lands in your checking account.
This makes the overnight money account an ideal parking space for amounts of money that you will need in the foreseeable future, but would like to keep separate from current income and expenses. So if you want to keep your finances well organized, you should have an overnight money account.
Can’t I use my current account or savings account to save?
Basically yes. But: If you don’t have an easy-to-use overnight money account in addition to your current account, you often simply spend a surplus – and don’t save. And even if you save, you quickly lose track of things.
In addition, you risk the abuse of your current map more damage if you do not umleitest your savings contributions: the more balance on the current account, the more can clear an impostor.
And finally: You should take the overnight interest rates with you. Today, balances on current accounts and savings books are practically no longer subject to interest. The average annual interest rate for savings books is just 0.01 percent, while the best offers for overnight money are 0.5 percent.
Small example: For a credit balance of 10,000 euros, with an interest rate of 0.01 percent, you receive only 1 euro in interest per year. With a call money account with 0.3 percent interest, it is at least 30 euros