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DZ Bank: Low interest rates cost savers billions

D.he historically low interest rates cost Germany’s savers a total of 732 billion euros. DZ Bank comes to this amount in a current study on World Savings Day. The loss relates to the period from 2010 to 2020 and includes the loss of interest on bank deposits as well as on long-term investments such as bonds or insurance. A normal interest rate of 2.3 percent, i.e. the average interest rate for bank deposits from 1999 to 2009, serves as the reference value.

The loss of interest on bank deposits alone amounts to 386 billion euros. The losses must be contrasted with the cheaper lending rates. According to calculations by DZ-Bank economist Michael Stappel, borrowers have saved 353 billion euros in interest over the past ten years. If you take this into account, the bottom line in private financial assets is an interest loss of 379 billion euros in eleven years, he writes in his study.

“The massive losses in the return on financial assets play a role, for example, for private households who have relied on interest income as an additional source of income,” says Stappel. These would be confronted with similar problems as foundations, the expenses for their foundation purpose mainly covered by the income of the foundation capital. But interest income is an important pillar, especially for building wealth. Since 2008, however, the nominal interest rate on deposits, bonds and insurance has been falling steadily.

In addition, German savers avoid risks. They do not like to invest their money in stocks or funds, with which they could avoid zero and negative interest rates and generate returns. “While over 70 percent of financial assets are invested in cash, deposits, insurance and bonds, direct investments in stocks currently do not even make up 7 percent of financial assets,” says Stappel.

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