Misconceptions about call money that are easily avoidable

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Investors should not succumb to the widespread misconceptions about overnight money. Here are the most important facts. Find out what you need to know about call money here - these misconceptions will soon be nothing but myths for you.

Call money is only suitable for short-term parking of money

This is not true. You can easily hold overnight money for years and decades. It is often the better interest-bearing alternative to the conventional savings account and the credit balance is just as flexibly available.

Assets are safe in a call money account

This statement is only true with regard to one aspect of security: If you choose savings deposits at German credit institutions or banks within the EU, there is protection. This protection is guaranteed by the deposit guarantee system. The situation is different, however, when it comes to the risk of your assets shrinking due to the general depreciation of money. This is because, due to the ongoing low-interest phase, the interest rate of a call money account often falls short of the inflation rate. Nevertheless, compared to other investment options, the call money account offers the best conditions for investments that should be available at any time. This makes them particularly suitable for investing a liquidity reserve.

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The investment in call money is burdened with considerable risks, because the interest rate can change at any time

It is considered a characteristic feature of call money that the bank can increase or decrease the interest rate granted for it on a daily basis. However, in fact, many credit institutions offer overnight deposits with a fixed interest rate period of several months. For example, you can make investments where the call money earns interest at a fixed rate for a period of up to half a year. The bank's overnight deposit account, for example, includes an interest rate guarantee of 6 months for new customers with the option to extend for a further 6 months.

There are no differences between European deposit insurance for call money

In principle, this statement is not unjustified, because all deposit guarantee schemes within the European Union are based on EU directives that are binding for all member states. In particular, EU Directive 2009/14, which came into force in 2009 as a consequence of the global financial crisis, regulates the protection of savings deposits. Nevertheless, the protection of the German system offers you great advantages: in the event of insolvency of the bank with which you hold your call money, it enables you to settle the claim quickly in German.

For the evaluation of a call money offer it depends only on the interest rate

In addition to the nominal interest rate, the timing of interest credits also plays an important role in determining the return on an investment in overnight money. By crediting interest semi-annually, quarterly or monthly, you benefit from the compound interest effect. In the case of the forex-exness.net/downloadexness/ call money account, for example. It is best to base your selection decisions on the effective interest rate, which takes into account all factors influencing the return on an investment.