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Best Savings Account in Germany 2024 How to Earn High-Yield Interest Rates

Last Update: 22 January 2024

1. How to earn Interest with a Savings Account in Germany

Inflation can gradually diminish the value of your deposits. More suitable choices for storing spare cash may exist than a current account. In this sense, a “Germany Savings Account” presents a much better alternative.
Money market savings accounts (Tagesgeldkonto) can effectively minimize potential losses. You do not only earn interest but are also completely flexible and can access the money at any time.
A trustworthy fixed-rate savings account (Festgeldkonto) enables you to earn interest confidently, outweighing inflation. Savings accounts in Europe are generally considered a safe investment option. The deposit insurance schemes of Germany or the respective EU countries protect your invested funds.

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2. How a “Germany Savings Account” can make more of your Money

A savings account can be a wise choice if you want to make the most of your money in Germany. Interest rates are supposed to remain favorable in 2024; the time seems the perfect to explore the benefits of a high-yield savings account. Not only can it help you grow your savings, but it can also become an essential pillar of your financial portfolio. With the right choice of savings account, you can earn competitive interest rates and stay flexible simultaneously. To afford a real estate purchase, a memorable vacation, or build an emergency fund…

3. How High are Interest Rates on Germany’s Savings Accounts?

If you’re considering opening a savings account in Germany, one key factor is the interest rate. After all, the higher the interest rate, the more you can earn on your savings. After a long phase of poor interest rates in Europe, the level has significantly increased since 2022. Meanwhile, it has become possible to find high-yield savings accounts that outweigh inflation rates. 

Thanks to the Eurozone as a single currency union, investing your money all over the continent is very easy. Therefore, you are not only restricted to German banks but can also take advantage of foreign banks from Europe.

4. What Type of Germany Savings Account is Best for Me?

There are two principal types of savings accounts to differentiate: A flexible savings account (Tagesgeldkonto) and a fixed-term savings account (Festgeldkonto). Both account types pay out interest on your savings. Yet, they target different purposes.

“Tagesgeldkonto”: What is a Flexible Savings Account?

In Germany, one popular option is the “Tagesgeldkonto,” which translates to a “flexible savings account.” The terms “instant savings account” or “money market account” are often used in English, too.

This type of account is a convenient way to earn interest on funds that you need or want to be able to access at any time. With a Tagesgeldkonto, you can deposit and withdraw funds whenever necessary, making it a flexible option that suits your financial needs. Whether you save for a rainy day or plan for the future, a Tagesgeldkonto can help you make more of your money. A flexible savings account is an easy way to start saving. It is a good option if you have unused money in your checking account but need more time for personal long-term commitments.

What are the Interest Rates on Flexible Savings Accounts?

Flexible savings accounts typically offer interest rates that help you compensate for inflation or even slightly grow savings over time. Interest rates on money market accounts vary depending on factors like the bank in question, the key interest rate of the European Central Bank, or the current market conditions. In 2024, it is possible to find German flexible savings accounts that offer interest rates of up to 4%. Moreover, interest rates on Flexible Savings Accounts are not set in stone. It is advisable to regularly monitor and compare different savings accounts to ensure you are getting the best possible rate. The ability to shift funds at any time to another bank or savings account makes it easier to earn high-yield interest rates.

When should I open a Flexible Savings Account?

A flexible savings account is ideal for people requiring easy and quick access to their funds. The versatility and accessibility of call money accounts make them a valuable tool for almost anyone. You can “park” your money while generating interest and outweighing inflation. Typical use cases are usually:

  • Emergency funds: It is advisable to have a certain amount of money immediately available in an instant savings account for any unexpected event (e.g., job loss, illness, or a broken washing machine).
  • Future expenses: If you plan a more expensive vacation or purchase (i.e., a car), you can build up your balance on a “Tagesgeldkonto” until you have saved the dedicated amount or have reached the desired point in time for the expense.
  • Intermediary investment: An easy-access savings account can be a convenient temporary solution for funds until you have made a more permanent investment decision. The latter might be options like stocks or real estate.

“Festgeldkonto”: What is a Fixed-term Deposit?

A “Festgeldkonto” is also known as a “fixed-term deposit” or “term deposit account.” It is another popular savings account option in Germany. This type of account requires account holders to deposit a set amount of money for a specific period, typically ranging from a few months to several years. The funds are locked in during this fixed term, meaning that the account holder cannot access or withdraw the money until the agreed-upon term has ended. Banks and financial institutions offer guaranteed high-yield interest rates in return for this commitment, especially compared to instant savings accounts. Hence, a fixed-term deposit is an attractive option for savers seeking to grow their money steadily and securely. It is usually a valuable addition to your financial portfolio and complementary to a flexible savings account.

What are Interest Rates on Fixed-term Deposits?

Fixed deposit accounts offer higher interest rates than money market accounts. Even though they usually do not achieve the yields of broker accounts, they are also considered less risky.

The current market interest rate primarily influences the interest rate offered on fixed deposits. Factors such as the deposit amount and duration also determine the interest rate. One benefit of fixed deposits is that the interest rate remains unchanged for the entire investment period, providing a shield against any decrease in interest rates. However, this fixed interest rate can be a disadvantage if market interest rates increase, as depositors will not benefit from the upward trend.

When should I open a Fixed-term Deposit?

A fixed deposit account is an excellent option for individuals without the need for short-term funds.

To make investments into fixed-term deposits more flexible, the “interest staircase” approach has gained popularity. It involves dividing the funds into equal parts and locking each portion into staggered durations across multiple fixed-term bank accounts. For example, you can divide 9.000 Euros into three portions with a fixed duration of one, two, and three years. As a result, a part of the investment matures annually, providing annual flexibility. At that point, it’s possible to reinvest the money for another three years if you do not require the funds. Of course, you can also divide the amount into smaller chunks for even more flexibility. It also helps in the event of rising interest rates since interest rates adjust with every new term. However, if market rates decline, the impact will be inevitable.

Broker Accounts: A High-Yield Alternative to Savings Accounts

If you have a more significant sum to spare, broker accounts are a high-yield alternative to term accounts. They provide an option to gain substantial long-term profit. Broker accounts are a platform to grow wealth through investments in various financial products, such as stocks, bonds, and mutual funds. Investors actively participate in the global financial market, with all its chances and risks. Therefore, you should inform yourself carefully to develop an appropriate investment strategy.

5. How Secure is it to use a Savings Account in Germany?

With rigorous regulations and oversight by the German Central Bank (Bundesbank) and German Financial Supervisory Authority (BaFin), German savings accounts offer high protection for your funds. Funds on a German bank account are covered under the Deposit Protection Scheme up to 100,000 Euros per depositor and bank. Moreover, Germany is one of only nine states worldwide (together with Denmark, Netherlands, Sweden, Norway, Switzerland, Luxemburg, Singapore, and Australia) awarded with the highest AAA creditworthiness rating.

The Deposit Protection of 100.000 Euros is a harmonized European guideline. Therefore, it becomes relatively safe to invest across the entire EU. However, the implementation is handled on a national level. For instance, deposits at French banks are covered by the French scheme, which ultimately depends on the French state’s creditworthiness.

6. Do I have to Pay Taxes on Interest Earnings in Germany?

In Germany, any interest earned from savings accounts is subject to taxation. In some exceptions, you could be exempt from tax. This can be especially the case if an individual

  • Lives abroad and only invests their money in Germany without having a residence or
  • Stays within the limits of the tax-free allowance (“Sparer-Pauschbetrag”). There is a certain amount of interest income that is tax-free. For 2024, this tax-free allowance is 1,000 Euros for individuals and 2,000 Euros for married couples filing jointly.

Suppose you have a residence in Germany and exceed the tax-free allowance. You are usually subject to capital gains tax. This tax requires that a maximum of 25% of your interest gains will be taxed. However, the tax rate on interest earnings can be lower depending on your individual tax bracket.

When you open a savings account with a German bank, the bank handles the deduction of this tax automatically. They can consider your tax allowance automatically, too. You can provide them with a tax exemption order, known as “Freistellungsauftrag” in German. We advise consulting with a bank or tax advisor to determine the specific tax implications based on your circumstances.

7. How can I open a German Savings Account?

Opening a German savings account is a straightforward process.

First, choose the bank with the best terms and interest from your perspective. You then fill out the application documents, including the amount you want to invest. It’s important to note that some banks may have minimum deposit limits, especially regarding fixed-term deposits. The bank will inform you about any further required documents. Finally, you then transfer the money from your checking account or another reference account. You can usually do this all through online banking or your banking app.

8. What are the Best Savings Accounts in Germany?

Compare savings accounts in the tool below to quickly determine which banks provide the most competitive interest rates for both money market and fixed-term savings accounts. Once you’ve completed the comparison, you can conveniently open the desired account directly on the provider’s website. This streamlined process enables you to make informed decisions and efficiently set up your preferred account with the chosen bank. Compare savings accounts from banks in Germany and Europe, including traditional and online banks.

9. Conclusion

Regarding savings accounts in Germany, the ideal choice between a flexible savings account (Tagesgeldkonto) or a fixed-term deposit (Festgeldkonto) varies and depends on individual preferences and how much interest you want to gain.

  • A flexible savings account provides flexibility. It allows account holders to access their funds anytime while still earning some interest. 
  • A fixed-term deposit offers a long-term and reliable savings alternative by providing higher interest rates and the ability to lock in funds for the contract period.

Ultimately, selecting the most suitable savings account depends on personal factors such as investment goals, desired level of accessibility, and duration of the investment. Interest rates vary frequently. You can easily compare the best current market offers in our comparison tool. The opening process is then easily handled online.

10. Frequently Asked Questions


  • The information provided in this post is non-binding and for informational purposes only. It does not represent a complete market overview. We do not take responsibility for the accuracy and up-to-dateness of the information provided on the list. Please re-check the final conditions and prices on the providers’ websites (§18 ZKG).
  • We do not intend to provide financial advice. All investments involve risks of loss.
  • Some of the links in this article are promotional links. We gain a commission if you purchase an item or open an account following this link. It helps us keep this site running and does not come at any cost to you.

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