Maximum interest rate rises to one percent: first increase in 30 years

Maximum interest rate rises to one percent: first increase in 30 years

After 30 years without any changes, there is finally an increase in the maximum interest rate, which is raised to one percent. The Federal Ministry of Finance made this decision after the German Actuarial Association proposed the increase in November. This adjustment is the first in three decades. The maximum interest rate was previously 0.25 percent, after it was reduced from 0.9 percent during the low interest rate phase in 2022.

The maximum technical interest rate is calculated based on the return that insurance companies can generate with safe investments. A safety buffer is also deducted. This increase to one percent therefore reflects current market conditions and is intended to help insurers achieve appropriate returns.

The decision to increase the maximum technical interest rate is likely to have an impact on various aspects of the insurance industry. It is expected that insurance companies will have to adjust their calculations and rates to take the new conditions into account. Customers may also notice changes in their existing insurance contracts resulting from the increase in the maximum interest rate.

This measure marks a significant step in adapting insurance regulations to current economic conditions. It remains to be seen how the increase in the maximum technical interest rate will affect the industry in the long term and whether further adjustments will be necessary in the future.