FXStreet (Delhi) – Research Team at Deutsche Bank, notes that despite a sustained low interest rate environment, the savings ratio of German households increased recently, as the savings motive (retirement savings) and the income development compensate for the low interest rates. Key Quotes “German households continue to show a very cautious investment behaviour. The majority of new investments are still directed towards low-yield deposits and insurance- as well as pension and insurance products. Risk-carrying investments only receive moderate inflows, even though for now the net outflow from this asset class seems to have stopped. Investors also appear to continue to replace their exposure in the bond market with more reliance on investment fund certificates.” “The impact of low interest rates is rather noticeable through significantly increased borrowing activity. H1 2015 saw the highest increase in indebtedness of German households since the Dotcom bubble in the early 2000s and it was mostly used to finance property investments. Nonetheless, we do not see the need for worries regarding debt sustainability. In relation to the strongly growing income, household debt is rather low – both in international and historical comparison. Even under extreme assumptions it would take until the mid-2020s in order to reach a debt level comparable to the early 2000s.” For more information, read our latest forex news.