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Savings Accounts

What is an Overnight Deposit?

An overnight deposit is a flexible way to save money and access it at short notice. To invest your savings as an overnight deposit, you need an overnight deposit account, which is managed by a bank and offers variable interest rates without fixed notice periods. Savers can deposit any amount and receive interest on the invested amount. Since the term is not predetermined, investors can access their overnight deposit at any time, making this form of investment particularly popular in Germany. Unlike other accounts, an overnight deposit account is not intended for everyday transactions and cannot be used for transfers or standing orders, as is the case with a current account. Instead, deposits or withdrawals of the invested money are made through a settlement account, similar to a savings book. There are no notice periods, and overnight deposits do not offer negative returns compared to securities.

How High are the Interest Rates for Overnight Deposits?

Overnight deposit interest rates in Germany are continuously declining and currently average about 2.25%. This is because banks set their interest rates based on the capital market interest rate level and the key interest rate of the European Central Bank (ECB), which means that changes in ECB rates usually also affect overnight deposit rates.

However, when compared to offers from European banks, there are significant differences in interest rates. Through platforms like AGw, investors can compare overnight deposit rates from various banks and achieve interest rates of up to 3.80%.

Who Benefits from an Overnight Deposit Account?

An overnight deposit account is generally suitable for anyone who wants to have access to their invested capital at any time and places great value on security. It is particularly useful for savers who don’t want to park their money in non-interest-bearing current or savings accounts. When comparing interest rates, it becomes clear that overnight deposit accounts, especially with foreign banks, often offer significantly more attractive returns.

What to Do when Overnight Deposits Need to be Paid out?

With an overnight deposit account, savers have the option to decide via AGw whether they want a partial or full payout. This arrangement can be made at any time in the customer area of the respective bank. Generally, the deposits and interest are transferred to the specified reference account within one business day.

The Advantages of an Overnight Deposit Account

The biggest advantage of an overnight deposit account lies in its flexibility. Savers can receive the full investment amount at short notice, change banks, transfer deposits to a reference account, or deposit additional money. Moreover, overnight deposits are an uncomplicated form of investment that is protected by EU-wide harmonized deposit insurance up to 100,000 euros per customer and bank.

How Safe is an Overnight Deposit?

Capital investments in overnight deposits are secured by various mechanisms. Firstly, the equity capital of the offering bank protects the deposits in the overnight deposit account. Additionally, some banks take voluntary measures to ensure quick and complete repayment of the investment amount in case of insolvency.

The statutory deposit insurance covers investment amounts up to 100,000 euros (in England: 85,000 GBP, in Sweden: SEK 1,050,000) per customer and bank, which applies to all EU countries. This means that the security fund of the respective country steps in if a bank is unable to make a repayment.

How Deposit Insurance Works

Unlike other investments, such as securities, there is no possibility of price losses with overnight deposits. Additionally, investors using products in AGw’s overnight deposit comparison are not confronted with additional cost risks.

Double Protection through Voluntary Deposit Insurance

In some countries, there are additional voluntary security systems besides the statutory deposit insurance. The Deposit Protection Fund of the Association of German Banks (BdB) is the largest of these funds and secures numerous EU banks. Its financing comes from more than 130 private banks.

AGw at a Glance

  • Competence and experience: Utilize our in-depth expertise and many years of experience in the financial sector.

Registered users of AGw can access a wide range of attractive offers for overnight deposits and fixed-term deposits with just one account, starting from a minimum investment of 20,000 euros.

  • billion EUR in savings deposits brokered AGw has so far
Billions of euros in savings deposits brokered and offers its investment service to over 40,000 customers.
  • An excellent investment service
This includes the seal awarded by TÜV with a grade of 1.8 and the award for “Highest Customer Satisfaction” in the Digital Financial Experts category by Focus Money and several other renowned and independent online portals have already rated our service multiple times.

What is the Difference between Savings Accounts and Fixed-Term Deposits?

The main difference between savings accounts and fixed-term deposits lies in their flexibility and investment duration. While savings accounts have no fixed term and investors can access their deposits at any time, fixed-term deposits involve investing a sum for a predetermined period at a fixed interest rate, during which the money cannot be withdrawn. Additionally, the interest rate for savings accounts can be adjusted daily, while it remains stable for fixed-term deposits until the term ends.

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