Savers stay loyal to their passbook despite high inflation – this would be the best choice

High inflation destroys German savings deposits. Nevertheless, many people still rely on savings accounts. What is the best alternative.

Despite higher inflation rates, most Germans continue to invest their money in forms of savings that pay little interest. In a survey commissioned by the Association of German Banks (BdB), 45% said they had deposited money in their savings account.

38% rely on cash on demand or term deposits. The proportions remained unchanged from last year’s survey. Multiple entries were possible.

The mentioned forms of savings yield little or nothing when interest rates are low. More and more institutes are even charging negative interest on current accounts above a certain amount. According to the survey, a third (33%) of the 1,000 investors surveyed also own stocks, fund shares or other securities. A year earlier, it was 31%.

Inflation is currently at 7.3%, its highest level in 40 years. As a result, the money that savers put into interest-free accounts becomes less and less valuable. It is for this reason that experts advise consumers to invest their money in the stock market instead of placing it in their savings account.

T-online columnist and investment expert Gerd Kommer also warns: “Your money is at risk in the savings account.” So-called ETFs, special funds that map entire stock indices such as the Dax particularly inexpensively, are particularly suitable for beginners and thus allow a broad diversification of your risk. Read here why ETFs are such a popular investment. How to invest your money in stocks we explain to you here.

The highlight: As with savings accounts, you can regularly save stocks, funds and ETFs, which earn much more than the interest of savings accounts. You can read exactly how such an ETF savings plan works here.

According to the BdB, sustainable investments are gaining in popularity. According to the survey, more than 6 million people in Germany now invest their money in such funds and shares. Their number has more than doubled since 2019. “Above all, knowledge gaps and lack of information still prevent many investors from making sustainable investments,” explained BdB chief executive Christian Ossig.

Sustainable investments are increasingly popular

According to the information, half of the respondents have heard the term “sustainable investing”. However, about a third of them do not know exactly what is behind it. Ossig still sees “clear room for improvement,” especially among low-income people. “Unfortunately, it is still too often a question of income whether to invest in ‘green systems’.”

According to the survey, the higher the income, the more investors bet on sustainability. One in four people whose net monthly household income exceeds 3,500 euros declares investing “sustainably”.

By sustainable investments, we mean investments that include environmental factors, social responsibility and good corporate governance. Last December, the EU set specific criteria for climate-friendly investments and, despite much criticism, proposed that investments in gas and nuclear energy be classified as sustainable financial investments for the time being. Renewables are already classified as climate-friendly in the classification system called taxonomy.

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