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.
HOME LOAN SAVINGS AS A LONG-RUNNER IN THE MONEY SAVING PLAN
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 This variant was intended for a group of people for whom pension insurance was no longer applicable for reasons of age.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.