German savings banks offer near‑zero interest on deposits as inflation erodes returns

An analysis by the financial portal Biallo of 594 German Sparkassen and Volksbanken found that the average perpetual daily‑money‑market (Tagesgeld) rate is just 0.4 %. Eighty‑one percent of Sparkassen and 73 % of Volksbanken pay no more than 0.5 %, with the lowest rates reported at 0.001 % (10 cents per €10,000 per year). By contrast, banks that park excess cash at the European Central Bank receive a 2.0 % deposit rate, and inflation in Germany stood at 2.6 % in May, meaning savers lose purchasing power – roughly €214 per €10,000 held in a low‑rate account. Over‑regional and direct‑bank competitors offer higher rates, up to 2.6 %, and U.S. banks such as JPMorgan Chase have introduced limited‑time offers of 4 % for four months, with Germany’s Norisbank matching 4 % for six months. Analysts note that while the ECB is expected to raise its policy rate, many German savings banks have been slow to pass on higher yields to their retail customers, leaving depositors with returns that do not keep pace with inflation.