"Finanzen einfach erklärt" mit Daniel Jung Teil 4 - Zinsen

Hey everyone, it's great to have you back with us. Today, the fourth video in the series Finances simply explains, in which the Sparkassenfinanzgruppe Hessen-Thüringen and I bring you closer to the world of finance. As silly as it may sound, dealing with your own money is extremely important for your future. In today's video, it's about the topic of interest. You may have heard that you may not be able to really get started with it, so it's best to explain it as simply as possible. Let's go! What are interests? Interests are a final payment, i.e. a payment when something is lost. In short, when we lend money, we get interest. When we take out a loan, we pay interest. The easier and faster you want to have money on your account, the less interest you get. Because high liquidity, i.e. availability of money, means less planning security for the credit institution. That's why there are higher interest rates on a savings account with a shorter term, but they're not particularly high. On a fixed-interest account, the interest rates are higher, but you can't always get your money back. Let's take a look at the most important types of interest. In banknotes, there is a reference interest for credit institutions or banks, and they manage it, so to speak. In the USA, the Federal Reserve System determines the interest rate. For the interest rate in Europe, the European Central Bank is responsible, i.e. EZB. When the EZB increases the interest rate, the interest rates at credit institutions, such as the savings account, also increase. The nominal interest rate or real interest rate is made up of four components. The processing fee, the liquidity premium, the inflation premium, and the risk premium. Together, they make up the nominal interest rate. If you subtract the inflation premium, you get the real interest rate. Number three is the dispo interest rate. When you open an account, you can use a disposition credit, short for dispo. A disposition credit is a credit for an account transfer. This can be, for example, 600 euros. If you transfer your Giro account, that means you don't have any money left and you fall into the minus range, interest rates depend on this value. The dispo should therefore only be used in exceptional cases and only for a short time. So be sure to pay attention here, not just better, not at all, or just go to a dispo for the short term and not to an even higher dispo. If you don't transfer your Giro account, but save money, the dispo can of course be an advantage for you. If you deposit your money, financial institutions offer the so-called goodwill dispo. This applies, for example, to the daily Giro account, the fixed Giro account, or to building savings contracts in the deposit phase. We discussed in the previous video how to use the dispo. And now we come to a term that is often mentioned, but hardly explained. The interest rate. The interest rate is an effect where the money we save or invest not only grows on the original amount, but also on the already earned interest. Here's an example. 1,000 euros on the daily Giro account. The interest rate would be 5% per year. And now the effect of the interest rate. After the first year, you would have 5% on 1,000. That would be 50 euros. That means you have 1,050 euros. Let the money lie. And now it is not the case that 50 euros interest rates occur again, because the 5% now go to the 1,050 euros. That means there is a bit more. And so you end up in year 2 at 1,102.50 euros instead of if you would only add 50 euros more. Now the 5% again go to more and that from year to year. And if you would calculate that now, you see, and if you would also visualize it, that gives an exponential effect. And then the interest rate effect occurs. The key to the interest rate is that the interest rates earn interest again. The longer you invest the money and the higher the interest rate is, the faster your assets grow. But beware! If you have debt and pay interest on it, the debt increases exponentially due to the interest rate. So, these were the most important interest rates. Now you have everything in view. Very important again, have good, much better, and then best increase the money through the interest rate effect instead of taking out debts. If you want to learn more about the topic of interest, go to www.kredite.de. In my next video, it's about the topic of loans. So look forward to it. Until then, ciao!