This means that interest rates on bank deposits are gradually rising again. Should investors review their financial strategy in light of this?
Here are expert answers to important questions.
How do interest rates and inflation influence each other?
"While interest rates are expected to continue to rise in 2023, inflation is likely to gradually decline again under the influence of higher interest rates. This means that overall, investment opportunities should gradually improve in the coming years, taking into account the devaluation of money caused by inflation," explains Dr. Andreas Bley, Chief Economist of the Federal Association of German Cooperative Banks and Raiffeisen Banks (BVR).
In such an environment, bank deposits would become more attractive: “In general, bank deposits are not the most profitable form of investment, but the money is particularly safe and quickly available if the worst comes to the worst.”
What alternatives are there to bank deposits?
"In the long term, investment funds offer higher returns with manageable risks," says Andreas Bley. They can be composed in different ways; there are equity, bond, mixed and real estate funds.
Equity funds offer particularly high earnings potential: "Many savers are cautious because they think that investments in investment funds are only for professionals or for large investment amounts. But fund savings plans also offer attractive earnings potential for savers who regularly put aside smaller amounts of money starting from 25 euros."
In addition to the actual capital gains, they would also open up the possibility of generating income through increases in the value of the fund share, which can be realized when the share is sold or returned.
Why should you start building wealth early and get good advice?
Those who start saving early and have patience can build up a considerable cushion that will pay off in emergency situations or improve their standard of living in old age, advises the BVR financial expert.
The early accumulation of financial assets is particularly important if one plans to finance one's own home.
“For most citizens, it is worthwhile to examine their own financial situation as early as possible and to plan strategically for the future,” says Bley.
Qualified banking advice is the best way to do this: “The right decisions depend heavily on the individual situation. Age, income and family situation play an important role.”
