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Germans like to save. But inflation, weak economic conditions and gloomy prospects are currently curbing their ambitions. However, liquid assets are still large.
Germans like to save: If you add up savings accounts, daily deposits and fixed-term deposits, German banks managed 4,492 billion euros or almost 4.5 trillion in private savings in August. This is revealed by the banking statistics from the Deutsche Bundesbank, which are… Hessian radio for World Savings Day.
But the days when West German children headed to the local savings bank with their piggy banks on October 30th are long gone. At that time, they filled their savings account given to them by their grandparents. The reward was rulers, erasers and coloring books. Today, in many places it is difficult to even find a bank branch with real people behind the counter.
More than World Savings Day, overall consistent economic growth has contributed to solid savings behavior in the West and throughout Germany since 1990. In the GDR, campaigns for savings played little role. But it wasn’t a lack of money, but a lack of goods.
The German savings book
Savings accounts used to be the method of choice for German private customers. It was a booklet in which deposits and withdrawals were entered by hand and confirmed by the bank or savings bank with a signature and stamp. There was moderate but constant interest on savings accounts. Anyone who needed larger amounts had to give a three-month notice period.
The first official figures for West Germany come from the end of 1953. The hard post-war period was already over and things were improving economically everywhere. West Germans had the equivalent of 5.5 billion euros in their savings accounts. Ten years later, the amount had increased almost sevenfold to the equivalent of 37 billion euros. At the beginning of the 1990s, savings deposits across Germany fell briefly and then rose again. If you add daily money and time deposits, you can see that there was only a dent in the savings account, not in overall savings.
However, from 1990 onwards, savings were statistically no longer distributed among 64 million West Germans, but among the now 80 million inhabitants of reunified Germany. At the beginning of the 1990s, the vast majority of financial assets were in West German accounts, with a downward trend ever since.
Fixed-term deposits are catching up
The German savings account reached the peak of its popularity in 1999 and from 2011 to 2013: 600 billion euros were stored in savings accounts with low interest rates. However, customers of private banks understood that savings accounts often benefit the bank more and less the savers. As soon as interest rates fell, they cleared out their savings accounts in favor of fixed-term deposits. Those who stored their money in savings banks and Volksbanks proved to be particularly loyal. Nowadays, the old love for savings accounts is no longer gone: deposits have currently fallen to 460 billion euros.
The official figures show that people are doing business sensibly: they keep their money together, pay attention to availability and look for good interest rates. With a rapidly increasing trend, almost 1.3 trillion euros are invested in fixed-term deposits, i.e. investments that are available to banks for months or even a few years. Even larger amounts are stored in current account accounts that are always available. With a slight downward trend, it is currently almost 2.8 trillion euros. This shows that investors want to be flexible in economically uncertain times.
The bottom line remains: Despite the difficult situation and poor prospects, people in Germany can still save overall – and they are doing it.