The limit for penalty interest continues to fall: more and more banks are charging fees for larger assets. However, some financial institutions are now already demanding penalty interest from a balance of more than 5,000 euros. In addition, there is inflation or currency devaluation to an extent that can no longer be underestimated.

Most of the customers who inquire with us come to us with the subject of penalty interest or custody fees. Almost everyone underestimates inflation, which causes much greater damage to our money. Inflation in Germany is higher than it has been in decades. The official inflation in Germany is now over 4 percent. It should be noted here that certain sections of the population and certain metropolitan areas such as Berlin, Hamburg and Munich feel that inflation is higher. This is mostly due to the living situation, a healthy diet and an above-average standard of living. And it is precisely these sections of the population who feel the legal expropriation most clearly.

In addition to Germany, Spain in particular stands out among the major euro countries. There, too, the inflation rate is rising sharply and is now estimated at at least 5 percent. It is now particularly high in the Baltic states of Estonia (6.4 percent) or Estonia (6.3 percent), and Slovakia also stands out with 5.1 percent.

With a view to the inflation rate, the future monetary policy of the central banks, which has so far been extremely expansionary and thus oriented towards inflation, is of particular importance.

The public media continues to downplay the high inflation. We cannot understand this. We do not want to panic, but underline that very few people receive an annual salary increase of 5 percent and also very few people have a qualified financial investment that generates at least 6 percent return per year.

Now some are probably wondering why we need a return of at least 6 percent? Because of course we still have to pay taxes on investment income. That is why we have to invest our money at least 6 percent per year on average so that the value of our savings simply maintains the value of the previous year.

This is a situation in the environment of penalty interest, overnight interest rates below 0.1% and a guaranteed interest rate of 0.25 percent from 2022, which presents even asset managers like us with a difficult task.

On the one hand, we have to match the risk profile of our client and, on the other hand, we have to develop a portfolio that can generate at least 6 percent per year over a medium to long-term period. The use of investments in stocks, equity funds, ETFs and crowd investments has meanwhile become unavoidable in order to be able to achieve such an average return at all.

We would be happy to sensitize you to this topic and bring you closer to these asset classes in an understandable way. We help you to invest your money safely and sensibly and to avoid penalty interest. Contact us for a non-binding and free initial consultation.