Lydia Biel


Sale and Lease Back: Make directly available capital out of your fixed assets

Sale-and-lease-back is one of the most modern forms of leasing. The financing makes it possible to activate hidden reserves in the company and thus increase your liquidity.

Real estate, machines, vehicle fleets and more – this investment capital is important for companies, but not flexibly available when fast liquidity is required. Sale-and-lease-back changes that. By selling hidden reserves and then directly leasing them back, equity is quickly available. The advantages of financing include, among other things, a low risk and tax advantages. Small and medium-sized companies in particular like to use this form of financing.

What is Sale and Lease Back?

In sale and lease back is it is a financing in which a company (eg. As vehicles, machinery, real estate or real estate) assets sold to a leasing company, and subsequently directly to a pre-determined rate (usually 7 to 14 percent pa) leased back. As a result, the leasing company receives liquidity without restrictions in its operational business, since the leased goods never physically leave the company. After the leasing contract expires (usually 48 months), the company has the option of buying back the goods from the leasing company.

How is the repurchase price determined?

There are three factors that have an impact on the buyback price:

  • The wear and tear of the goods (calculated using the depreciation table)
  • The interest during the lease term
  • The customer’s request

A higher monthly leasing rate usually leads to a lower repurchase price (vice versa). The type of product leased also has a major influence: a computer has a shorter useful life and a higher loss in value than a car- consequently the buyback price for the computer is also lower.


Rapid increase in liquidity

Through the sale and the leasing that is directly associated with it, hidden reserves quickly become equity that you can use flexibly.

Low risk

In the case of sale-and-lease-back, unlike a bank loan or other loan, no additional collateral is required to realize the financing.

Tax advantages

Since the leasing costs represent an operating expense, they flow into the company’s profit and loss account and thus reduce the tax burden.

More flexibility

When gaining liquidity through sale-and-lease-back financing, you are not tied up for the long term as you would with a purchase, but remain flexible.


When a company needs money, the classic variant is often a bank loan. Sale-and-lease-back represents an alternative form of financing. As the name sale-and-lease-back suggests, this type of financing consists of two components: sales and leasing.

1. Sale

As an alternative to a bank loan, a company can sell its hidden reserves, i.e. its fixed assets . This can be objects such as real estate, machines or the vehicle fleet, as well as immaterial objects such as patents. In order to increase the company’s liquidity, such goods are sold to a sale-and-lease-back provider and immediately leased back. For example, if it is a machine, it may already have been written off in full or in part. When a hidden reserve is sold, the company’s fixed assets decrease and the equity ratio increases at the same time. The company has increased its liquidity many times over.

2. Leasing

The sale of the goods is directly linked to the subsequent leasing. They remain in use by the seller without interruption and can be used as before. The ongoing leasing costs can be claimed for tax purposes. As operating expenses, they proportionally reduce the profit and thus also the tax burden.

This means that the sale-and-lease-back process is not only a particularly low-risk and flexible form of financing, it is also easy for companies to implement in practice. The respective conditions and key points of the financing can, however, vary between the providers.


Thanks to its specific advantages, the sale-and-lease-back process is used more and more frequently in the manufacturing industry. The modern form of financing for the procurement of liquidity is also very useful for SMEs – i.e. small and medium-sized companies – since, in addition to the direct liquidity advantages, the risk is small, while the company can continue to operate in a predictable manner. Depending on the specific industry, there are different options for companies to profitably use sale-and-lease-back financing.

Sale-and-lease-back financing can be particularly worthwhile for companies and companies in the manufacturing sector. For example, production machines or systems can be sold and then leased cheaply in order to continue production as usual. However, if the machines are very specific or if they are custom-made, appropriate financing is usually difficult. The sale-and-lease-back procedure is ideal for both old and new machines. It should be noted that better conditions can usually be achieved with well-maintained machines. When purchasing a new machine, a possible early drop in the price of the machines must be taken into account.

Whether it is a large vehicle fleet or individual special vehicles – the vehicle fleet is usually a major cost factor for companies. However, by selling and leasing motor vehicles, these costs can be significantly reduced in order to create financial freedom for other purchases or investments.

The vehicles are leased back directly from the financing partner, which also reduces costs for repairs and maintenance of the vehicles. At the same time, the entire vehicle fleet can continue to be used as before – but now on more favorable terms.

Own real estate usually ties up an enormous amount of equity. If a cost-intensive expansion is planned or if the company is in financial difficulties, such a capital reserve can make all the difference. Sale-and-lease-back financing makes these reserves usable. The properties that come into question for this form of financing include classic office buildings as well as storage and production halls as well as special laboratories. Whether it is a new building or a property that has been used for many years – the structural condition is the most important factor.

Purchase of goods financing

You urgently need new goods or means of production, but do not want to invest your own money or are currently not liquid? Then financing for the purchase of goods (= finetrading) could be the ideal solution for you.


Growth: You can increase your sales by financing additional projects.

Flexibility: You can arrange the repayment of your purchases flexibly and receive payment terms of up to 120 days.

Price reduction: Since the finetrader pays for the goods in full immediately, you receive discounts of up to 2%.

Image gain: Your supplier benefits from the reliable payment of your finetrader, whereby you establish yourself as a reliable trading partner.

Independence: You reduce the dependency on your house bank by using an additional financier.

Win-win situation for companies and suppliers

By paying the supplier invoice immediately, the customer can claim special conditions and discounts. The resulting price reduction (better purchase prices) is often sufficient to completely cover the small additional costs for the finetrading provider in the first month. With the immediate payment, the entrepreneur not only improves his relationship with the supplier, but also receives his own liquidity. The money that he would otherwise have needed to buy goods can now be invested in other things.

The entrepreneur gains time and creates completely new room for maneuver that would otherwise not be available to him. Ideally, the goods have already been sold by the time the payment is made to the finetrader. There is no dead stock,  the balance improves . The supplier is also happy, because the process offers him delivery security, increases his sales volume and improves his own rating with optimized key figures in the  cash flow . He no longer has any delays in payment and saves himself time-consuming and costly dunning procedures. Its  credit risk is done by the provider of the goods purchase financing.


Presentation in 4 steps

1. You hire a fine trader

You set up a goods purchasing line at a finetrader that you can use flexibly. The line usually has a term of two years.

2. The finetrader buys the goods from your supplier

You instruct the finetrader to buy the goods you want. Since the finetrader pays for the goods in full immediately, you receive discounts (price reductions) of up to 2%.

3. The goods will be delivered to you immediately

The finetrader only acts as a middleman so that the goods can be delivered to you immediately by the supplier.

4. You have a payment term of up to 120 days

The finetrader grants you an extended payment term of up to 120 days. For the service, you pay the finetrader a fee, which is fixed depending on the model or increases with the duration of the repayment.


This type of  pre-financing of goods also  makes your company independent of the allocation lines of your house bank. The usual bank collateral  does not apply, which makes the financing of the purchase of goods an  attractive alternative to the current account credit . When purchasing goods or operating resources, the entrepreneur no  longer has to allow a cash discount or other price reductions to expire due to a poor liquidity  situation. This funding for the companies  often even cheaper than if there was a  bank loan  would have taken.

Strengthen relationships with your trading partners

As usual, you take on the negotiations with your supplier yourself, including control over the quality of the goods – your middleman will finance the purchase. This gives you more time to increase your liquidity by having a longer period of time available for production, as well as a strategic time window that you can use to optimize your product. Financing for medium-sized companies has never been so carefree. A framework contract and the examination of the documents form the legal framework for the financing. If the outcome is positive, you simply agree the payment modalities with your supplier and your pre-financing of the goods is already done. Without having to worry about the necessary liquidity in advance, you can start production immediately.

The money savings plan is the mother of all savings plans. Current accounts, as we take them for granted today, were still so unpopular a few decades ago that savers preferred to pay into the classic savings book at the bank counter. In fact, savings plans were not automated until the early 1960s, which started the triumphal march of the current account. Every month a certain amount was transferred to the savings account by standing order. Many use this opportunity to build their wealth.

Key facts at a glance:

  • The interest on savings deposits is currently well below the inflation rate (only applies in phases of low interest rates!).
  • A money-saving plan is only suitable for building up a basic financial cushion. You should then choose another form of investment.
  • Building societies are suffering from the phase of low interest rates and are trying to force savers out of contracts with good interest rates.
  • Income from a money saving plan is subject to taxation through the flat tax.


Building savings is ultimately nothing more than a money-saving plan – but with a fixed goal. In the past, the building societies often advertised their product as a pure savings investment and many consumers only signed a building society contract with the aim of benefiting from the better credit interest rates compared to a savings account.

The pure investment in the form of a home loan and savings contract has lost much of its popularity today, as the building societies can no longer offer high interest rates. On the contrary: Numerous savers have litigated against the funds because they terminated the old contracts in order to no longer have to service an interest rate of 3% and more. 34% of savers now use a building society loan agreement; this may mainly be due to the desire to purchase real estate.

Bank savings plan with Riester: the funded money savings plan

Pension in the form of a bank savings plan has never really established itself on the market – which is not tragic. This variant was intended for a group of people for whom pension insurance was no longer applicable for reasons of age. The historically low-interest rates of recent years have made it almost impossible for banks and insurers to generate guaranteed pension payments with their savings.

Taxation on a money saving plan

Income from capital assets is taxable. This applies regardless of the age of the saver and whether he or she has other types of income. Income from capital assets includes interest, dividends or realized price gains from securities transactions.

GOOD TO KNOW: If you have paid too much withholding tax, you can get it back from the tax office as part of your tax return.

The bank pays the due withholding tax from the first interest income from the money savings plan directly to the tax office – but only if you have not issued an exemption order. With an exemption order, you instruct the bank to pay you investment income up to a maximum of the saver’s allowance without deducting the flat tax.

Anyone who wants to invest money and is interested in investing in funds will come across the term issue surcharge relatively quickly. But what is behind these additional costs for funds? What exactly is an initial charge? How, for what and when is it calculated for investments? Here you will find information on the subject of front-end loads and fund fees as well as tips on funds without front-end loads.

What is an initial charge?

Taken literally, the issue surcharge means: A surcharge is levied for the issue of funds by financial service providers. These costs are added once to the investment amount and must be paid directly by the buyer. An issue surcharge is generally levied by the provider to cover fees for consulting and sales services. It is the difference between the issue and redemption price of funds.


Issue price = share price or total value of the acquired investment + issue surcharge,

Redemption price = share price or total value of the acquired investment

What is the average front-end load for investment funds?

The amount of the front-end load varies between 0 and 7% of the investment amount and is determined by the respective investment company. The front-end load is always given as a percentage, as the value of funds varies and so do the costs for the units. Since the issue surcharge is calculated as a percentage based on the amount invested, no fixed sums can be given in euros due to the fluctuations.

Why are the subscription fees different?

The amount of the front-end load depends on the investment objective or the focus of the fund. As a rule, bond funds that invest in fixed-income paper have a regular sales charge of 3–3.75%. In the case of equity funds or funds of funds, the issue surcharge is usually 5% and in some cases it can be higher.

Are discounts available on sales charges?

The investment company that launched the fund also determines the amount of additional costs for an investment in funds. The respective sales partners conclude sales agreements with the investment companies and can thus co-decide on discounts. In some cases, discounts of up to 100% on the regular issue surcharge are granted.

What other costs besides a front-end load can be incurred when investing in funds?

There are some costs to consider when considering investing in funds. In addition to the issue surcharge, these are above all: Fees for the administration and management of funds: These are often calculated annually on a pro rata basis from the investment amount. In the case of traditional funds, such fees are on average 0.8 to 2%. Fees for custody account management: These vary greatly from provider to provider. The depot is often run free of charge.

Activity is usually rated positively in business, while passivity is often presented worse. But does that also apply to financial investments? And what about securities trading? Is it always better to act quickly than to wait patiently? Does activity beat passivity? Here you can find out what passive investing actually is – and how it differs from active investing.

What does passive investing mean?

A buy-and-hold strategy is pursued with passive investing. This means that it is a long-term investment strategy. Market timing, i.e. speculating on phases of price loss or price increase (so-called bearish and bullish phases) when buying and selling stocks, hardly plays a role in passive investing. The same applies to stock picking, i.e. targeted investing in individual stocks of listed companies.

The question arises: How do passive investment strategies work when neither market timing nor stock picking are important? Passive investing is speculating on the long-term growth of markets. In contrast to active investing, it is not about “beating the market”, i.e. being better than the benchmark index, but about mapping the market.

How does passive investment work – and what do you invest in?

Passive investing generally does not involve investing in individual securities or stocks in listed companies or in funds actively managed by fund managers. Instead, investments are made in so-called ETFs (Exchange-Traded Funds) and above all in passively managed index funds. It is speculated on the long-term growth of the indices.

What is the difference between passive and active investing?

Good to know: The Sharpe ratio or the Sharpe quotient is often used as an important indicator for the ratio of the excess return on an investment to the respective risk.

In active investing, in contrast to passive investing, there is speculation on “beating the market” in terms of performance. Active investment strategies are about outperforming the respective index as a benchmark and achieving an excess return.

Important methods in active investing:

  • Stock picking : the targeted purchase of particularly promising securities
  • Market timing: buying or selling at the optimal time

In order to benefit from even minor price fluctuations, it is important to closely monitor the market and its fluctuations (volatility) and to act quickly. In day trading , for example, financial products are often bought and sold again in a very short time window. Here investors speculate on quick chances of profit, but must also expect an increased risk of loss.

Discover more information about trading stocks as well as helpful tips on buying stocks .

What are the advantages of passive investment strategies – and what are the disadvantages?

As with other investments, there are also advantages and disadvantages to passive investing. However, not all pros and cons of active investing apply to all investors, as they depend on the respective investment goals and the life situation of the investor.

For example, if you are looking for quick returns and are not afraid of risk, active investment strategies are probably more positive than passive ones. The following comparison of the advantages and disadvantages of passive investing compared to active investing can only serve as a guide, but must be compared with your own investment strategy.


  • Less time consuming than active investing: Since there is no demand for quick purchases and sales, the market does not have to be constantly monitored – that saves time.
  • Distributed risk through diversification: Since passive investing generally does not involve investing in individual companies but in ETFs, the risk is spread across numerous companies.
  • Lower fees than with active investing: ETFs usually have significantly lower fees than funds, where there is usually a 1 to 5% issue surcharge (except for funds with no issue surcharge ) plus ongoing fees.  
  • Let time work for you: If you invest longer, the probability of a loss decreases.
  • There are no emotional decisions: When investing actively, investors often make very emotional decisions and under time pressure – this can lead to wrong decisions. With passive investing, ad hoc decisions are not required, so that emotionally charged short-circuit actions become less likely.


  • Plan more time for profits: unlike active investing, passive investment strategies are not geared towards short-term, but rather long-term profits – so quick profits are rather rare.
  • The risks of ETFs are quickly underestimated: Especially ETFs that do not track stock indices but rather smaller markets can increase the risk for investors.
  • Optimal entry and exit times are difficult to predict: Since market timing is usually not taken into account in passive investing, optimal times for purchases and sales, i.e. phases of a bear market or bull market, can be missed. As a counter-argument, it is often cited that the long investment period is more decisive than the time of investment.
  • Missing short-term highs: While active investors can benefit from quick profits (with higher risk), passive investors have to be patient.
  • There is no tension: When investing actively, emotions can boil – even in a positive sense, for example with unexpected returns and dividends. Passive investing is quieter – adrenaline junkies won’t get their money’s worth here.

A house bank has comprehensive disclosure obligations about reimbursements that it receives from a fund provider. It has to provide much more comprehensive information than a freelance investment advisor. A bank received 5,760 dollars in reimbursement for brokering a stake in a film fund. The plaintiff accused the bank of having clarified too much and above all not about it.

Investor accuses bank of wrong advice and demands reversal

The investor asked the defendant bank to reverse the stake in the amount of 80,000 dollars. The defendant bank advised him wrongly in the context of the advisory contract and in particular not cleared up about essential circumstances such as the reimbursement.

Consultation contract concluded tacitly

  • The subscription of the fund was preceded by two consultations between the plaintiff and the bank’s client advisor.
  • According to the court, a consultancy contract was tacitly concluded through the consultations. The bank violated its obligations under this investment advisory agreement for the following reasons:
  • it has not informed the plaintiff that it will receive a commission of 7.2% of the limited partnership capital subscribed by the plaintiff from the fund company named in the fund prospectus for the successful recommendation of the fund
  • a bank must inform an investor about rebates, so-called kickbacks, without being asked and, in principle, regardless of the amount, during a consultation.
  • Contrary to the view of the bank, there is also no obligation to provide information about reimbursements because the bank is the plaintiff’s house bank and the bank was the lender for the debt-financed part of the capital.

Bank has higher disclosure obligations than a freelance investment advisor and the court pointed out that there was a serious difference between a bank and a freelance investment advisor. Because for a customer who does not pay a commission to the independent consultant himself, it is obvious that he receives a commission from the fund and thus, from an economic point of view, from the investment amount.

What a customer can expect from their bank:

  • a neutral consulting service
  • that a bank provides the service for third-party products within the framework of the already existing customer relationship or upon initial contact as an acquisition free of charge or
  • that the bank expresses its interest in receiving a commission promised by the fund

Conclusion: The bank has to reimburse the investor for the remaining part of his equity step by step.

What is a model depot?

A model portfolio is a virtual securities account that has the same functions as a real securities account. With a model portfolio, stocks, bonds or fund units can be bought and sold on stock exchanges. You can place orders, set limits or try out speculative forms of investment such as warrants via your model portfolio. The big difference to a real securities account is that all transactions in the model securities account are purely virtual and you can thus familiarize yourself with securities trading without risk.


  • The big advantage of the model portfolio is that you can simulate real securities trading with your virtual portfolio without taking any financial risk.
  • In addition, the model portfolio offers beginners the opportunity to learn about trading in stocks and other securities.
  • The model portfolio offers advanced investors the opportunity to analyze portfolios in detail. Using this analysis, investors can learn, for example, how the risk of their real portfolio can be minimized.
  • The model portfolio gives an insight into how the exchanges work. Because the prices, price gains and price losses are based on the real conditions at global trading venues.
  • With the model portfolio, you have the option of investing in an equity portfolio that is suitable for your requirements and your risk tolerance , which you can then transfer to a real portfolio.
  • The virtual depot enables investors to recreate the equity portfolios of professional investors in order to learn from their strategies.
  • Ultimately, the model portfolio can help to trade stocks, just to see once which action leads to which consequence. This experience can be valuable in order to run a real depot later or in parallel.


  • When you start with your new model portfolio, it is best to select only a handful of values. Then take a month. During this time, you observe exactly how these values ​​develop.
  • At first, it is best to concentrate on values ​​from a specific industry, for example the construction industry or the pharmaceutical industry. With similar competitive conditions, you can understand what causes price increases or losses.
  • Try out limits and set them for individual securities. This will tell you how the automatic notifications work when limits are reached. The portfolio model, for example, automatically informs you by email if the limits set for buying or selling securities are not reached or exceeded.

Is it also worthwhile for experienced investors to create a model portfolio?

A model portfolio is not only suitable for beginners. For advanced investors, the virtual depot is ideal for comparing strategies and possibly discovering investment potential. Experienced investors benefit from their knowledge when setting up a model portfolio and, with just a few clicks, put together the portfolios that they want to analyze and monitor more closely.

For example, if you already have a depot, you can map it again virtually in the sample depot and look for optimization options. You start the export of your real depot data to the sample depot with just a few clicks. In addition, you have the opportunity to try out various stock exchange strategies with the model portfolio without risk. For example, it is very popular to compare the performance of high-risk investment portfolios with lower-risk portfolios. It is also possible to experiment with stocks from certain sectors and industries or to test asset classes. All the findings from your “training” can help you later on trading with your real portfolio.

How is a model depot structured?

Model depots are not structured uniformly. After all, even in the real world of the stock exchange, no two securities accounts are exactly the same. The structure of the model portfolio depends on your investment strategy and the objective of your portfolio. If you would like to use the model depot for training, you will build it up in the same way as your real depot so that you can then transfer the findings from the model depot to your real depot.

If you are a beginner, your model portfolio will probably initially only consist of a few values ​​so that you can understand stock market trading based on the development of these values. You can set up the model portfolio as you wish and simply try out how, for example, a riskier investment strategy develops compared to a low-risk investment strategy.

Sample portfolios from stock professionals

In addition to the model portfolios, in which you can actively trade virtual securities yourself, there are also so-called “model portfolios” that are managed by professionals. Using these fictitious depots, stock market professionals clearly demonstrate how a depot can be managed successfully. Newcomers to the stock market as well as ambitious investors have the opportunity to benefit from the investor knowledge of the experts or to receive tips for investment strategies. However, those interested in these model depots are only spectators and cannot actively participate. The same applies to so-called “watch lists” that some providers work with. They make it possible to analyze certain price developments, but cannot be compared with a model portfolio.

Sustainability has always been important topic in all areas of society – and it is becoming increasingly important. Because it has long been clear that our actions today will shape the future of tomorrow. So it’s no wonder that sustainability is becoming increasingly important in the area of ​​stock market trading and financial investments. But how exactly can sustainability and investment be reconciled?

What exactly does impact investing mean?

“Impact investing” is a well-established term for impact-oriented investing in the English-speaking world. In addition to the economically-oriented investment goals of return, security and availability , ethical aspects and sustainability also play a decisive role in impact -oriented investments . The social responsibility to emphasize, in the English language in addition to impact investment and the acronym is SRI ( S ocially R esponsible I nvestment) use.

How can sustainability be defined in investments?

ESG stands for ” E nvironment – S ocial – G overnance” and refers to the three areas of environmental, social and corporate governance.

Sustainability can encompass both ecological and social aspects. In the case of companies, there is also how corporate goals are pursued and implemented in practice. The acronym ESG has established itself internationally for these 3 sustainability criteria.

Many rating and research agencies as well as financial service providers and investors, for example the members of the UN Initiative for Responsible Investment (UN PRI), work in the financial sector to assess sustainable securities using the ESG criteria. Since the areas of environment, social affairs and corporate governance are very general, the United Nations Sustainable Development Goals, or SDGs for short, often serve as a guide in addition to the ESG criteria.

How do sustainable investments work?

Sustainable investments aim to exclude controversial industries and companies that do not meet the ESG criteria or international standards from investments. The investments should flow into impact-oriented industries, companies and organizations that act in an environmentally and socially responsible manner and that ensure good working conditions and fair wages for employees and suppliers.

Examples of impact and value-driven investments:

  • Sustainability fund
  • Ethics fund
  • Eco and environmental funds
  • Other themed funds that not only meet economic factors but also ethical, social and ecological criteria

Good to know: There is still no clear and recognized standard that describes when an investment may be given the ESG label and is therefore a sustainable investment. ESG ratings and sustainability seals can provide guidance when choosing sustainable investments, despite different focuses.

As an investor, you decide in which stocks, ETFs or funds you invest your money. You can do your own research for companies whose corporate goals correspond to your ideas of economic, social and ecological sustainability.

Sustainability : Make impact-oriented investments in sustainable funds, stocks and ETFs.

Health : Promote innovative products and services in the health industry with your investment and benefit from the boom in the health sector.

Technology : Our present and our future are significantly shaped by technological developments. Invest in the innovative technology industry.

Consumer trends : Benefit from tomorrow’s trends.

Robotics : Automation, artificial intelligence and robotics are among the megatrends of our time. Invest in robotics, the technology of the future.

Cybersecurity : Security in information and communication technology has become essential for many companies. Bet on the cybersecurity trend on the stock exchange with selected securities.

Fixed-term deposits play an important role in the accumulation of wealth for many people. For a long time, investment advisors advised that part of the savings should be deposited in a fixed-term deposit account. A fixed-term deposit was even considered a sensible component for retirement provision.

However, this situation has changed fundamentally: The days when investors could look forward to a welcome bonus when opening a new account are over. Fixed-term deposits have lost a considerable part of their appeal due to the dramatic collapse in interest rates . What are the consequences for you as an investor?

Time deposit: what is it?

With a fixed-term deposit, you invest cash in a special account for a previously agreed period of time. That is why one speaks of “time deposit”. During this period you will forego direct access to your money. In return, the bank guarantees you a fixed interest rate for the entire term; the interest is then credited to your fixed-term deposit account.

A comparison of fixed-term deposits, overnight deposits and savings bonds

Fixed-term deposits have long been recommended as a short to medium-term investment. Put cash assets as a fixed deposit in, you should be aware that you can not have your money during the conditioning period. As a rule, a certain minimum deposit is required for the fixed-term deposit. The investment amount is also limited, the maximum deposit varies from bank to bank.

Fixed-term deposits: Fixed-term deposits, overnight deposits and savings bonds in comparison

The savings bond works in a similar way to the fixed-term deposit: Here, too, you invest a minimum amount of money at a fixed interest rate for a certain period of time. However, savings bonds usually have a longer term and are therefore less flexible than fixed-term deposit accounts. Just like the fixed-term deposit account, a call money account is a pure interest account. Unlike with fixed-term deposits, however, with overnight money you have access to your capital at any time and without notice. However, you have to accept an even lower interest rate for this.

What different terms are offered for a fixed-term deposit?

The term fixed-term deposit is no coincidence: In the fixed-term deposit, all conditions – investment amount, term and interest rate – are firmly agreed. You choose the investment period yourself; one often hears about fixed-term deposits for 1 year, 5 years or even 10 years. Regardless of the duration you choose, the following generally applies: If the investment is longer, there is often a little more interest in the current phase of low interest rates. Anyone who expects market interest rates to rise again soon should not commit their money for too long in order to be able to quickly switch to more attractive offers if the interest rate level actually develops positively.

Termination of the fixed deposit account: What happens if the money is urgently needed before the term expires?

As a time deposit saver, you leave your money to the bank for a fixed period of time, but you receive slightly higher interest than for a call money or savings account. Unless there are important exceptional reasons or the contract expressly allows for early termination, you cannot cancel a fixed-term deposit during the term. The bank alone then decides whether to release the required amount anyway as a goodwill gesture, but as an investor you must expect loss of interest, administrative and cancellation costs in this case.


Bad interest rates: is the time deposit still paying off?

Fixed-term deposits can be a very interesting investment product for savers as long as 2 conditions are met:

  • Security: Since you have no access to your assets, the time deposit must be protected against possible bankruptcy of the credit institution during the investment period.
  • Attractive interest: The money you invest generates the profit exclusively from the fixed deposit interest . With a long investment period, you as an investor also benefit from the compound interest effect, which increases your income.

What does this mean for you as an investor? Since the fixed deposit interest depends on this development, for the near future, whether investing in fixed deposits or overnight deposits, you would have to allow for very low interest rates. You will therefore get very little return on your money, and some banks are even talking about negative interest rates for larger cash assets.

Inflation destroys the purchasing power of fixed-term deposits

The zero interest rate policy has enormous implications for savers who invest their assets in fixed deposits. If you park cash in a bank account at the low fixed interest rates customary in the market during these times, the savings will in fact continue to lose value due to inflation.

Time deposits in the interest rate trap: How to avoid the risk

The low interest rates have two negative effects. On the one hand, the compound interest effect cannot develop over the investment period. On the other hand, inflation reduces the purchasing power of invested cash. Both of these together transform fixed deposits from a safe investment option into a problematic one. How can investors react to this interest rate trap?

It is not that difficult to find a suitable investment that can develop well. Instead of interest gains, rely on dividends and the chance of price increases. You have a chance of these returns if you invest your money in securities such as stocks or funds. However, do not forget that there is a risk of total loss when building capital with securities.

Independent of fixed-term interest: wealth creation with funds and stocks

If you want more returns on your money, you can invest in securities. Shares, bonds, certificates or funds offer greater earnings opportunities, but also a higher risk due to possible price losses. Such “volatile” securities are particularly suitable for investors who want to achieve more returns than with minimal interest-bearing overnight or fixed-term deposits and who are prepared to accept losses in return.

How to Invest in Securities

Investing money in securities is easier than many people think. All you need is a securities account for administration: it gives you a quick and precise overview of the status of your papers. You can use the order mask to buy and sell funds and stocks online.


Surely many still know the times when you brought your saved money to the bank.This was then paid into their own savings book and there was also a small gift. But is the savings book still worthwhile as an investment these days? After all, most savings accounts now earn little or no interest at all.


  • Relatively quick availability of the investment
  • protected by deposit insurance


  • Currently no to very low interest on savings
  • Numerous alternatives with better interest rates
  • No inflation protection
  • Possible effort to withdraw money or cancel savings account


In order to terminate a savings account and initiate a payout, in most cases it must be in writing and signed; the banks will be happy to send you the relevant form. You can send the cancellation by post or, alternatively, go to the bank branch in person and clear the savings account. You can transfer the amount you saved to your current account or even have it paid out. You can find out whether your savings account can also be terminated by email or other means in your contractual documents with the bank.


In order to terminate your savings account, the termination should contain at least the following information:

  • Recipient (name and address of the bank or the responsible bank branch)
  • Sender (your name and address)
  • Date of termination (current date)
  • Subject (for example: “Termination of savings book with account number …”)
  • Details of the savings book (account number or details for clear allocation / savings certificate)
  • Cover letter (text in which the termination is expressed. Example: “I hereby terminate my savings account (savings account number) as soon as possible / on DD.MM.YYYY (desired date). Please confirm my termination.”
  • Account details (the bank details of your current account to which the savings account balance is to be paid out. This includes details of the account holder and at least the IBAN number)
  • Handwritten signature (your own handwritten signature at the end of the letter of termination)

NOTE:   If you want to be safe, it is necessary to send the cancellation in writing and signed by post (registered mail) to the bank. If you still have a “real savings account” in book form (and not just account statements), this must be included with a corresponding note. If you follow these instructions, clearing the savings account is not a hurdle.

What is advance interest on the savings account?

If you want to cancel your savings account before the notice period expires, so-called advance interest will be charged. According to legal regulations, this fee is 25% of the interest that you would have received for the remaining term and the remaining balance in the savings account.

NOTE: Since the interest rates on savings books are usually very low in the current environment, the advance interest is usually very low. In addition, this only comes into play if you want to dispose of the credit before the period of notice has expired.

What are alternatives to the savings book? What to do with the credit?

The question now is what the possible alternatives to the savings account are. Ultimately, the aim should be that the amount saved over the years does not lie idle in the current account without interest. The constant inflation also threatens a constant devaluation of the credit. Below you will find alternatives for investing the savings after closing the savings book, possibly more sensibly.

  • Daily and fixed deposit
  • Stocks and equity funds
  • Property


How can I close my savings account? Should I have the savings paid out, should I invest it elsewhere, or should I leave the savings book in place? If you want to find out more or cancel your savings account directly, the following points can be noted:

  • In times of low market interest rates, there is hardly any interest on savings accounts
  • The credit in the savings book is usually available relatively quickly
  • If you want to cancel the savings book, we recommend a written cancellation by letter as registered mail or in person at the bank branch, depending on whether you prefer a payout or a transfer to your current account
  • Savings plans can be alternatives to the savings account. For example, based on selected stocks or funds. Real estate or other forms of savings can also be an option.
  • bitcoinBitcoin (BTC) $ 30,018.00 2.5%
  • ethereumEthereum (ETH) $ 1,996.98 0.84%
  • tetherTether (USDT) $ 1.00 0.17%
  • usd-coinUSD Coin (USDC) $ 1.00 0.07%
  • bnbBNB (BNB) $ 304.43 2.67%
  • xrpXRP (XRP) $ 0.418372 0.57%
  • binance-usdBinance USD (BUSD) $ 1.00 0.13%
  • cardanoCardano (ADA) $ 0.527607 0.7%
  • solanaSolana (SOL) $ 51.76 0.21%
  • dogecoinDogecoin (DOGE) $ 0.086639 0.52%
  • polkadotPolkadot (DOT) $ 10.00 0.61%
  • wrapped-bitcoinWrapped Bitcoin (WBTC) $ 30,038.00 2.55%
  • staked-etherLido Staked Ether (STETH) $ 1,963.94 1.07%
  • avalanche-2Avalanche (AVAX) $ 29.82 3.86%
  • tronTRON (TRX) $ 0.073457 2.03%
  • shiba-inuShiba Inu (SHIB) $ 0.000012 1.65%
  • daiDai (DAI) $ 1.00 0.17%
  • litecoinLitecoin (LTC) $ 70.83 3.75%
  • crypto-com-chainCronos (CRO) $ 0.193811 1.84%
  • leo-tokenLEO Token (LEO) $ 4.96 0.69%
  • matic-networkPolygon (MATIC) $ 0.644540 1.64%
  • ftx-tokenFTX Token (FTT) $ 30.57 0.66%
  • nearNEAR Protocol (NEAR) $ 5.98 2.97%
  • bitcoin-cashBitcoin Cash (BCH) $ 193.69 0.93%
  • chainlinkChainlink (LINK) $ 7.10 0.12%
  • stellarStellar (XLM) $ 0.130126 2.74%
  • okbOKB (OKB) $ 12.36 0.12%
  • cosmosCosmos Hub (ATOM) $ 10.64 1.97%
  • flowFlow (FLOW) $ 2.87 4.97%
  • algorandAlgorand (ALGO) $ 0.433193 4.86%
  • moneroMonero (XMR) $ 162.76 2.01%
  • ethereum-classicEthereum Classic (ETC) $ 20.64 0.99%
  • apecoinApeCoin (APE) $ 7.93 1.9%
  • uniswapUniswap (UNI) $ 5.06 0.46%
  • hedera-hashgraphHedera (HBAR) $ 0.102549 2.29%
  • vechainVeChain (VET) $ 0.030536 0.12%
  • elrond-erd-2Elrond (EGLD) $ 91.72 4.19%
  • internet-computerInternet Computer (ICP) $ 7.99 1.98%
  • theta-fuelTheta Fuel (TFUEL) $ 0.063215 1.59%
  • magic-internet-moneyMagic Internet Money (MIM) $ 0.995033 0.19%
  • axie-infinityAxie Infinity (AXS) $ 21.07 5.71%
  • filecoinFilecoin (FIL) $ 7.99 1.37%
  • decentralandDecentraland (MANA) $ 1.09 1.49%
  • compound-ethercETH (CETH) $ 40.06 0.68%
  • the-sandboxThe Sandbox (SAND) $ 1.27 1.92%
  • chain-2Chain (XCN) $ 0.092579 4.33%
  • tezosTezos (XTZ) $ 1.72 0.1%
  • defichainDeFiChain (DFI) $ 2.82 3.25%
  • kucoin-sharesKuCoin Token (KCS) $ 14.87 2.44%
  • fraxFrax (FRAX) $ 1.00 0.01%