Banks that offer the best rates of interest - Germany

Recommended institutions for savings

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Could anyone possibly point us to the best bank/institute where we could get the best zinsen currently for festgeld or sparkonto?

we have a small sum to invest and want to regularly earn an interest on savings.

Owain Glyndwr
BMW Spar und Invest

Splits your investment between a Sparbuch and an investment fund. 6% guaranteed on your Sparbuch for a certain number of months plus whatever you gain on the fund, which is doing well medium to long term.
It depends on how much you want to invest, and how long to keep it in an account.

Have a look here:

Also have in mind if they qant you to pay monthly fee for the account, if they charge you for their bank card, or if you get them plus VisaCard for free

Cheers Joe
There are several sites that compare interest rates / conditions. Another one is Frankfurter Allgemeine but of course they're in German.

Take a look at CC Bank. They do it for me at the moment.
Found this from Google when I was curious about the interest rates in the world:

Brazil has the highest interest rates: 13%. I wonder if non-residents are allowed to open a bank account... I mean, in Germany, interest earned from savings is taxable. WTF! I have already been taxed what 40% or so for my income which part goes into a savings and I'm taxed again for this savings??
You're only taxed on the interested earned on your money, which happens in most countries as it counts for extra income.

You can invest in these other countries no problems. One of the reasons they set the interest rates so high is because they need outside money. Of course, when you do that, you'll be playing with the currency markets at the same time, which with a volitile currency like Brazil has, could easily wipe away any profit you made in a second.

I'm from Australia and had considered moving back money there where you can get 8% from a lot of banks. However, after the currency conversion fee's, you only need the dollar to weaken slightly then you've lost money.

By the way, you missed Iceland at 15.5% or Turkey at 16.75%.
See also this thread: Where to get good interest on your money
... and, starting next year in Germany, be taxed at a flat 25% rate, which will be a better deal than in the US or most other places where passive income is taxed at one's marginal income rate.

@Zimmer: Perhaps it's the mandatory withholding here that is confusing. It is clearly nicer to allow interest to compound and then pay the taxes in a lump sum later ... but once you're over a certain level of passive income, even the US compels one to pay estimated quarterly taxes ... and asess a pentalty if it's over a certain percentage of your total tax bill. Screw up enough and the IRS puts one on the hook for mandatory "back-up withholding", which is no fun at all.

N.b. I saw that Dresdner Bank now has a 5.1% CD-like product on offer.

Brazil has the highest interest rates: 13%. I wonder if non-residents are allowed to open a bank account... I mean, in Germany, interest earned from savings is taxable. WTF! I have already been taxed what 40% or so for my income which part goes into a savings and I'm taxed again for this savings??
Even if you parked your money somewhere else and earned (nominally, as has been pointed out previously) higher interest rates, you'd still be on the hook for local income taxes. Google up how tons of japanese housewives poured into New Zealand savings accounts for the yield pickup, and then watched the bottom drop out. there's no free lunch.

One can legitimately whinge about income tax on dividends being a "double tax" because the company paying the dividend does so out of after-tax income on which it's already paid corporate tax (which is one of the philosophical reasons Germany has made their corporate income tax pretty darn competitive vs. the rest of the world; note also that since so few germans are direct shareholders, few would likely benefit from more tax-efficient sharebuyback programs vs. straight dividends), but there's nowhere to hide on passive interest income on personal savings, because that's viewed as income on simple deferred consumption (which will then be VAT-able ... but that's a whole 'nuther can of worms )
Have you considered opening a Euro account in England? To my (limited) knowledge rates here are pretty miserable and accounts often incur charges. Buying Euros at this time anyway would not seem to me a great move although maybe your cristal ball is shinier than mine... Is the pound expected to slip further against the Euro? It may not be easy to open any account in Germany so long as you have no permanent address here.
Small Town Boy
There was a discussion the other day about whether the exchange rate was likely to improve or not. There's no real way of telling, but transferring all your savings right now may turn out to be an expensive mistake. It may also turn out to be a stroke of genius, although I guess the really smart/lucky people would have done it a year ago.

Given that you can currently get fixed-rate bonds in the UK offering 7% interest, I'd be tempted to weather the storm. You could always transfer half now and half later, and cut your loses that way.

Opinions on the UK pound vs. Euro currency trend
In a word, don't transfer the money.
7% savings rates offered by multiple institutions in the UK...can you get that in Germany?
Wait for GBP improvement against Euro.

Can you categorically guarantee you'll stay in Germany in retirement? A bulk transfer there and back at poor rates both ways could be the worst case scenario here.
Owain Glyndwr
you are allowed to open accounts in the UK as non-residents. Some banks don't like to do this but many are happy to oblige.
OG, can you suggest which banks are happy to oblige? When I tried to open a savings account with Nationwide, for example, I hit a brick wall as soon as I told them I didn't have a UK address. Maybe offshore is the way to go?
cruiser - I am still with HSBC. They had no problem with changing my residency to Germany on relocation.
Hams - changing your address is often not a problem when you ALREADY have the bank account, however opening a NEW bank account may cause problems.

The Halifax does not permit it for example.
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