European Central Bank Policy Drives Savings Interest Rates to New Lows

Savings account and fixed-term deposit rates in Germany continue to decline as the ECB lowers key interest rates to support the economy.

The European Central Bank (ECB) has reduced key interest rates from 4.0% to 3.0% in four steps, leading to declining savings rates across Germany.
Average fixed-term deposit rates for two-year terms have dropped from a peak of 3.39% in November 2023 to 2.27% as of late December 2024, according to Verivox data.
Economists predict further ECB rate cuts in 2025 as inflation subsides and the focus shifts to stimulating the struggling economy.
Rates on savings accounts, such as daily accessible accounts, have also fallen, with many banks offering minimal returns, some as low as 0.25%.
Experts advise savers to explore alternative banks for more competitive rates, as many traditional banks offer little improvement in the current market.