The Falling Tide of Savings Rates: Impact of ECB Monetary Policy
Decreasing interest rates persist. - Declining savings rates persist.
Gear up, savers! You might wanna brace yourself for less interest on your daily and fixed-term deposits. "Given the European Central Bank (ECB)'s ongoing interest rate cuts streak, savings rates are poised to drop even more initially," asserts Oliver Maier, CEO of Verivox Financial Comparison GmbH. This drop is particularly noticeable in short-term, easy-access savings accounts.
In not-so-distant future, the ECB is expected to reduce interest rates in the eurozone for the eighth time since summer 2024—likely this Thursday itself. The deposit rate critical for both savers and banks could dip from 2.25 percent to 2.0 percent. The ECB's decision will be out at 14:15 CET.
Waning returns on Fixed-term Deposits
As of June 2025, nationwide fixed-term deposit offers with a two-year term average 2.0 percent interest, according to Verivox's latest comparison. At its peak in November 2023, these averaged 3.39 percent. Since then, they've been steadily falling. One-year fixed-term deposit interest rates, on the other hand, have sunk to an average of 1.97 percent, edging below the 2 percent mark for the first time since February 2023.
Remember, you can check the yields of your savings on consumer portals like Biallo.de, not just Verivox.
Daily Interest Rates in Free-Fall
The average daily interest rates for nationwide offers have shrunk from 1.75 percent in March 2024 to 1.27 percent currently. Verivox claims this downward spiral has intensified lately: At the beginning of February 2025, average daily interest rates in Germany were still at 1.56 percent.
According to Maier, the swiftness of this decline in such a short timespan is pretty unusual since data collection began in January 2012. Seems like banks are passing on the falling key interest rates to their savers more efficiently nowadays.
Inflation: The Hidden Thief
Daily deposit accounts are go-to for many. By the end of last year, nearly a third of the total financial assets of German households were in cash and sight deposits that could be accessed with a moment's notice. The drawback? With an inflation rate of 2.1 percent in May, your money shrinks due to the lower interest rates you're getting.
- ECB
- Savings rate
- Verivox
- Fixed-term deposit
- Oliver Maier
- Frankfurt am Main
- Inflation
Background: The ECB's monetary policy has significantly impacted fixed-term deposit interest rates in Germany over the past couple of years. Here’s a breakdown of the key developments and influencing factors:
- Easing Monetary Policy: The ECB has been adjusting its key interest rates to maintain inflation and boost economic growth. Initial rate hikes in 2023 aimed to combat high inflation, but the ECB then moved towards monetary easing, cutting interest rates multiple times to stimulate the economy. This trend has been particularly notable since 2024, following the Swiss Federal Bank's initial rate cut in that year[4][5].
- Current Rates: As things stand, the ECB has lowered its deposit facility rate, main refinancing operations rate, and marginal lending facility rate to 2.50%, 2.65%, and 2.90% respectively[5]. These rates guide the overall interest rate environment in the eurozone, including Germany.
- Bank Responses: Banks and financial institutions typically adjust their deposit rates in response to changes in central bank interest rates. Lower ECB rates invariably lead to lower rates offered by banks for fixed-term deposits.
- Economic Context: Germany is grappling with an economic slowdown, with GDP contraction in Q4 2024 and mixed economic indicators in 2025[1]. Additionally, the uncertain political climate may affect bank lending and deposit rates, possibly leading to lower rates offered in order to attract deposits in a challenging environment.
- As a result of the ongoing interest rate cuts by the European Central Bank (ECB), significant drops in savings rates, particularly in short-term savings accounts and fixed-term deposits, are expected.
- The CEO of Verivox Financial Comparison GmbH, Oliver Maier, warns that the swift decline in daily interest rates over the past few months could negatively impact personal-finance and business sectors, as many households rely on daily deposit accounts and may lose purchasing power due to inflation.
