How does the interest rate increase to 2.5% affect us?

BarcelonaThe fact that the European Central Bank (ECB) is raising interest rates is the main measure it has to fight against the high inflation we are experiencing, largely caused by the cost of fuel. As individuals, how does this affect us? In short, money will be more expensive for everyone. If the price of money is higher, financing will be too. Consider that, when a bank calculates the interest rate of a loan, the operating margin is added to its cost. Therefore, we can expect an increase in the cost of new consumer loans.

Mortgages, on the other hand, since they are linked to the Euribor (around 3%), have already anticipated this increase in the cost of money. And here you might think: does the bank also finance itself? Yes, and in several ways: it can borrow money from the ECB (credit facility), from another bank (interbank interest rate), or from individuals, among others. The money we have in our checking account, to go further, the bank uses for its operations.

Lately, especially in small banks and neobanks, remunerated accounts have appeared: just for keeping your money there you receive an interest of between 2% and 2.5% APR. However, other products, such as bank deposits, which are around 3-3.5% APR, are as well. In any of these cases, for the bank, it is cheaper to finance itself with your money than to go to the ECB. If we look at it as individuals, this has an advantage. If we enter into a fundraising war by banks, they will raise the remuneration of remunerated accounts and also of deposits. Therefore, as small savers who do not want to take risks, it is a good solution. However, we must remember that this 2-3% does not cover inflation and is subject to the payment of taxes, which are usually 19% on the profit obtained. Banks can pay more for our money, but that does not mean that our money is worth more.