How much does it make or lose to keep money in a checking account? These are lean times for fixed income investors. Interest on the current account is now non-existent. Those on government bonds they are always lower. The motivation now also know the stones. The massive monetary policy interventions in support of economies. Everywhere, in every area of the world. Help from central banks is omnipresent. However, this means that both nominal and real rates (net of inflation) are close to zero or negative.
Are there alternatives to the current account? Yes I’m here. And they consist of deposit accounts. What is a deposit account? It is an account where money is deposited for a certain period of time. 3 to 18 months maximum, usually. For this car park, during which they cannot be touched, the bank pays the customer. In some cases even in advance. And, as mentioned, there is a big difference between the yields of many government bonds and those of several deposit accounts. And up to 100,000 euros these accounts are guaranteed by the Interbank Deposit Protection Fund. But how much do they make?
How much does it make or lose to keep money in a checking account?
The comparison with government bonds is merciless. The annual BOT returns 0.1%. An annual deposit account averages 0.7%. Seven times as much. Not bad, right? The fork ranges from accounts that yield 0.22% to 1.1% net. Definitely not bad. And what is the best account? It would be natural to answer that it is what makes the most. But it really depends. It depends on your needs, of course. And the conditions applied. Which vary a lot from institution to institution. And that can also reserve positive surprises, as you will read shortly.
Because deposit accounts also have entry thresholds. That is the minimum figures. Which can be very different from each other. In fact, it ranges from 500 euros up to even 10,000. However, it must also be said that, at times, deposit accounts can also be subject to improved conditions. Conditions apply if you leave the money for longer than the stipulated time. In some cases, these improvement rates even reach 1%. And they usually trigger when the deposit year is exceeded without ever withdrawing the money.
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