August 19, 2019

What can savers do against the low interest rates?

While aspiring builders and homebuyers look forward to the lowest ECB prime rate ever, more and more savers are dealing with fear. The reason is the extremely low interest rates on savings, the interest rates are alarmingly low. Many citizens are asking themselves why they should even save at all.

Savings over time lose more

Savings over time lose more

Saving, of course, makes sense, after all, it is always good when there are financial reserves for later times. However, an acceptable return should be achieved, since it is annoying when the return on inflation is destroyed and thus the savings over time lose more and more of purchasing power.

Interest rate market

Interest rate market

There is no one patent solution to this problem. Rather, savers can take different measures to increase their return opportunities at a calculable risk. Especially since risks do not always have to be taken. Especially in the interest rate market, there are notably large differences between the credit interest rates of the individual banks. For example, if you want to put on call money or time deposit, you should definitely perform an interest rate comparison. In this way, you can make sure that as a saver you get the best possible return and do not give away extra money because you bet on the wrong bank.

Stocks and bonds

Stocks and bonds

Otherwise, it is important to focus on diversification. Stocks and bonds promise better returns than interest rates, but are also linked to significantly higher investment risk. Anyone making such investments must expect to incur immediate losses. It is therefore advisable to spread the risk broadly. For example, it would be conceivable to invest part of the savings in typical dividend stocks and also to rely on safe corporate bonds. However, savers should not invest their money at all. Precisely because many markets are already extremely high, it is safe to withhold reserves. If there are strong corrections, there is at least the chance to buy cheap.

written by admin - Posted in Uncategorized

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