If you are feeling a little tight, you often overdraw your account and use the overdraft facility to overcome the bottleneck. Which is usually not a good idea. Especially in times of rising interest rates. Because the average interest rate for banks and savings banks is 10.07 percent.

Although the general level of interest rates is rising, but is still comparatively low, the average overdraft rate of banks and savings banks for private customers is 10.07 percent. According to an evaluation by the financial comparison portal “Biallo”, 264 of the 1167 financial institutions examined recently increased the interest rate, as reported by the “Süddeutsche Zeitung”. The average interest rate is now 10.07 percent, a year ago it was 9.99 percent.

According to the “Biallo” evaluation, the interest for overdrafting the overdraft facility is now 12.39 percent, after 12.29 percent a year ago. “You have to remember that the average rate was already very high and unjustifiable given the low interest rates,” said Horst Biallo, founder of the portal. The fact that banks are raising interest rates even higher is “a strong point”.

Consumer advocates expect that many people will get into financial difficulties as a result. “Especially in the current situation with the enormously increasing prices, even higher interest rates are very problematic,” says Andrea Heyer from the consumer center in Saxony. She assumes that more and more bank customers will soon be forced to resort to overdraft facilities.

Irrespective of this, debtors should be aware that the overdraft facility for the checking account is usually the most expensive loan from the bank. You should only use it exceptionally and for a short time.

For several years, Stiftung Warentest has observed that many banks offer special premium accounts with very low overdraft interest and extras such as a gold credit card or insurance. However, the account management fee here is so high that even customers who use the overdraft facility regularly have to pay more per year than for a standard account with a significantly higher overdraft interest rate.

In order to give consumers the opportunity to better compare the offers of the banks, the financial institutions have been obliged by law to present the current interest rates on their website in a clearly visible way since 2016. For almost 12 years, customers have had to be able to understand how and when the interest burden changes.

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(This article was first published on Tuesday, October 25, 2022.)