Low Interest: How Should You Invest Your Money Today?

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Low Interest: How Should You Invest Your Money Today? For several years now, a downward trend has been noticeable in overnight money, fixed-term deposits and the like. Take overnight money, for example: even the top providers on the market currently offer just over 1 percent. At many banks, interest rates tend to be in the range between 0.0 and 0.1 percent.

Although inflation has been low for some years now, the rate of price increases is above the average savings interest, so that the money invested in this way loses value every month. This real loss in value is already a negative interest rate.


In any case, a broad diversification across different product classes and maturities is recommended when investing . Among other things, investors can also use it to protect against inflation.

In addition to overnight money, fixed-term deposits and savings, the purchase of investment funds , real estate funds , precious metals or stocks can also be considered. Basically, investments in real assets (stocks, equity funds, real estate) are suitable as a means of countering inflation. But here, too, the investor cannot blindly access it. How the specific division should look varies greatly from person to person. This depends on the amount of assets, but of course also on the personal willingness to take risks. A fully comprehensive insurance against monetary devaluation does not offer this approach either


With savings account, fixed deposits and call money  is very safe investments, making them a central building block of any investment. The reason for this is the statutory deposit insurance. In the event of a bank failure, 100,000 dollarsgera per bank and customer are protected. However, banks and savings banks offer extremely different interest rates for these types of investments.

It is advisable to check regularly whether the interest rates of your own bank (still) correspond to the top conditions on the market. If not, savers can consider changing credit institutions.  Those who do not want to constantly change their bank can, for example, limit themselves to those banks that have consistently offered good conditions in the past. Ideally, you should save an amount of at least two to three monthly net income in a daily money account. With such an iron reserve, one can react to unforeseen expenses quickly and without borrowing.

IMPORTANT! In general, investors should check the interest currently paid by their bank regularly . If these are well below the top offers, you should think about changing providers.

In the past, good fixed-term deposits were above the inflation rate. However, with such offers, the money is tied up for several months or years. 

It cannot be spent or otherwise invested during this time if interest rates rise during the agreed investment period. Therefore, spread over the terms here too: For example, divide the amount available for a fixed-term deposit by a third and invest it for one, two and three years. In this way, you can respond with at least a partial amount if interest rates rise.

Stocks And Mutual Funds

Depending on your risk appetite and experience, mutual funds can be a suitable component of your investment. This is also a long-term capital investment. In contrast to individual stocks, investment funds offer the advantage that even small amounts can be widely diversified, i.e. buying many different stocks. If the price of a single company falls, price gains in other stocks can compensate for this.

Exchange Traded Funds

Particularly noteworthy in this context are so-called ETFs (Exchange Traded Funds) as a cost-effective alternative to conventional actively managed investment funds. With the latter, the fund manager himself decides which and how many shares to buy for investors, an ETF makes work easier. Above all, this saves costs, as the management fees of ETFs are significantly lower than those of traditional investment funds. However, if a fund incurs low costs, it has to generate significantly fewer profits in order for the investor to achieve a positive return.

Open real estate funds

Open-ended real estate funds can also be a suitable part of the investment. Lately, however, the industry has offered little positive news due to numerous fund closings: During the financial crisis, many investors wanted to get out of real estate funds by returning their shares to the fund company. According to the rules of the time, this was possible almost every day. But a large part of the money was in real estate, which is known to be difficult to turn into money quickly. Since the funds were unable to meet all payout requests, they completely suspended the redemption of units. As a result, no investor got his money for the time being, but had to wait until enough real estate could be sold. This waiting period can be several years. In order to resolve the contradiction between availability at all times and the long-term commitment of money in real estate, the legislature has issued new rules

Gold, silver and platinum

Gold, silver and platinum in the form of bars and coins are often touted as a safe haven against inflation. But caution is advised here too. Precious metals are a risky form of investment. They offer no interest or dividends, profits are only made when the price of the precious metal rises. The best example of this is the gold rate.  Anyone who invests in precious metals should therefore only do so with a small proportion of their total assets. Many precious metals such as gold are quoted in US dollars, so investors are also taking a currency risk.

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