The term interest rate guarantee refers to the contractual obligation of banks, insurance companies or other financial service providers to guarantee the customer a fixed interest rate for a certain period of time. Corresponding interest guarantees can be used in a wide range of financial areas. Thus, a respective guarantee is preferably used for account openings, for investment objects such as the time deposit or also within the framework of real estate financing as well as life insurance policies.
When opening an account, pay attention to interest rate guarantees
If, for example, you open an account with a commercial bank, interest guarantees are often used. As a new customer, you are guaranteed a fixed interest rate for a certain period of time from the time you open your account. In practice, many banks advertise in this regard with an interest guarantee period of three or even six months from the date of account opening confirmed by the bank. Often this type of guarantee is also used with regard to time deposits and overnight money. Here the banks grant you as customers interest guarantees for a pre-determined period of time. In this case, the very interest rate guarantee clearly defines the conditions and, above all, how long the current interest rate at the time of entry into force of the contract will remain in force.
Lucrative and profitable: call money accounts with interest rate guarantees
Profitable are appropriate overnight deposit accounts with interest rate guarantees especially for those investors who close the overnight deposit account at a comparatively very early point in time in this respect. Because over time, interest rate guarantees conceptualized in such a scheme become increasingly unattractive. This is due to the fact that the granted guarantee period is reduced on a daily basis, respectively. shortened. Particularly during low periods, opening an overnight deposit account with a guaranteed interest rate can give you appropriate security in terms of a worthwhile return; however, such guaranteed promises often apply only to a specific investment horizon.
Achieve independence from the prevailing interest rate level
How important or. How beneficial to you interest rate guarantees are in such a case can be seen in the normal terms and conditions. In fact, in the case of overnight deposits, unlike time deposits, the bank can set the prevailing interest rate on a daily basis. If, as an investor, you opened the account then, when there was an explicitly high interest rate, you still immediately lose out as an overnight customer when the bank lowers interest rates in this regard. So you run the risk of receiving a far worse interest rate virtually overnight than the day before. You can effectively protect yourself here with a guaranteed interest rate for a certain period of time. Therefore, provided that you are interested in a call account, you should basically look for an institution that also gives you appropriate interest rate guarantees on a call account.
Tip: Relocate your capital when interest rates are low
If, for example, the European Central Bank lowers the prime rate, it can usually be assumed that overnight interest rates will also fall. Here it depends now on your flexibility. Simply move your capital to another overnight account that advertises a guaranteed interest rate. Interest rate guarantees for new customers in the area of call money are usually for six to twelve months. With low-interest phases you can profit as an investor then only thereby.