Investment with fixed interest
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Inform with a deposit test
If you want to invest your money safely, you should take a closer look at fixed-term deposits. A fixed-term test, for example from the consumer magazine Finanztest, examines profitable investment opportunities. Here the most important conditions of numerous time deposit accounts are examined and compared in a report. You will also be told what to look for when comparing providers.
Fixed term test of the Stiftung Warentest
Consumer organizations such as the Stiftung Warentest regularly perform fixed-term tests. There are both monthly examinations, which are a bit shorter, as well as comprehensive analyzes. For example, in the Fixed-Term Test 2016, which appeared in the Financial Test Edition January 2016, the terms of more than 150 offers were compared. The Stiftung Warentest advises to always pay attention to the regulations for so-called deposit insurance, especially for foreign banks. In Germany, savers’ money is hedged up to at least 100,000 euros if the bank can not repay the assets.
Current test winner in the deposit test
Stiftung Warentest has been looking for the best offers for a term of one to ten years for the new fixed-term test. At one-year term, there is a maximum of 1.5 percent interest with the provider FirstSave Euro. At least 1.4 percent still offers the Leaseplan Bank. At two years, a return of 1.5% is also possible at Renault Bank directly and at Crédit Agricole Consumer Finance. According to the financial test, the latter provider also has good terms with terms of three and four years (1.7 and 1.8 percent, respectively). The VTB direct bank even offers a return of 1.9 percent if the capital is invested on a time deposit account for four years. At ten years , three providers have the highest nominal interest rate of 2.15 percent : IKB Retail, Von Essen Bank and Yapi Kredi Bank.
If you want to get an up-to-date overview, you should use the current fixed-term comparison calculator.
Then you should pay attention to the deposit
A time deposit account gives you the opportunity to invest your money very securely at a specific interest rate over a previously agreed period. Compared with the call money, the deposit offers a higher return. However, as a consumer you have no way to dispose of your money during the term.
The time deposit account must often be terminated by a certain period before the end of the contract period. Otherwise, the term will be extended to the current conditions, even if interest rates have meanwhile dropped significantly. As a consumer, you should clarify in advance how the termination conditions behave. Otherwise, your money may not be available for longer than you originally planned.
With a short maturity, time deposit accounts often do not generate more returns than comparable call money providers. However, if you are ready to give up your money for a longer period of time, you should opt for a longer term. With a regular payment of interest, you can thus achieve a decent return.
Time deposit: security with stable returns
The time deposit as well as the overnight money is protected by the Deposit Guarantee Fund. This means that with German banks or financial institutions you get up to the amount of 100,000 euros a wholly-owned compensation, should your deposit-holder become insolvent. Also with foreign offerers there are partly such safety mechanisms. However, you should clarify this in advance so as not to lose your saved capital in the event of insolvency.
When investing in the form of a fixed-term deposit, you should make absolutely sure that you can benefit from compound interest. This is the case if the interest income is regularly paid at least but annually directly to the deposit account. This increases your capital income substantially. Some providers pay out the interest income only at the end of the term, even for a multi-year term. However, this will result in losses for you.
You should either avoid such offers or only avail them if the return is high enough to compensate for the missed compound interest income. Therefore, pay attention to the selection of the offer on the payout.
Find out if you need to cancel your time deposit account a few days before the end of your term. If this is the case and you miss the notice period, it can happen that your provider creates your money again and then at the then valid conditions.
Use deposit comparison
Before concluding a financial investment, a comprehensive comparison of the providers is worthwhile. Our deposit comparison compares the interest rates and other terms of several banks. You can compare details of the offers and apply for your desired rate online. Use our service and compare the providers in detail!