What is a fixed deposit account? and which are the best fixed deposit accounts in Germany for savings?


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If you want to invest your money for a certain period of time and you value security, a fixed deposit account is a good choice.

Fixed deposit account: A fixed deposit account is an account in which money is deposited for a specific period of time. As its name suggests, the money is firmly invested. Accordingly, you have little chance of a payout before the end of the contract period.

In Germany, a fixed deposit account scores above all with stable interest rates and low risk. Within the German banking system fixed-term deposits up to an upper limit of € 100,000 are protected against loss in the event of bank insolvency. But for this you have to accept a low return.

A brief look at fixed deposit accounts

  • With the fixed deposit accounts, there is still interest. Besides, your money is safe.
  • Money that you want to invest securely for one to three years is therefore in good hands in a fixed-term deposit account.
  • When it comes to fixed deposit accounts, the following usually applies: the longer the term, the higher the fixed-term interest rates.
fixed deposit account

What is a fixed deposit and what is a fixed deposit account?

Fixed-term deposits are a variant of financial investments in which you invest a savings amount for a fixed period of time at a fixed interest rate. Therefore, fixed-term deposits are also known as fixed-term deposits or time deposits. You cannot withdraw the amount or dispose of it in any other way within the agreed period. At the end of the term, the invested money plus interest will be paid out to you. The interest rate is higher than the overnight money , which you can dispose of on a daily basis.

The account in which you place the fixed deposit is called the fixed deposit account. To do this, you need a reference account from which money is paid into the fixed-term deposit account. The terms for fixed deposits are usually between 1 month and 10 years.

What are the advantages and disadvantages of a fixed-term deposit account?

The advantages of a fixed-term deposit account include relatively high interest rates for a guaranteed period of time. But there are also some disadvantages.

A fixed deposit account has these advantages:

  • The interest is higher than with a call money account or on the savings book.
  • The interest rate is guaranteed for the entire period.
  • The longer you invest the money, the higher the interest.
  • Your savings are safe because there is a statutory deposit guarantee of up to € 100,000. This also applies to your fixed-term deposits in other EU countries.

A fixed deposit account has these disadvantages:

  • You cannot dispose of the money invested for the term of the fixed-term deposit.
  • The interest rate is fixed for the entire term. Any rate hikes in the market are not taken into account.
fixed deposit account

What should Expats in Germany watch out for when comparing overnight money accounts?

As similar as the time deposits of the various providers are, they differ greatly in some points:

1. Fatca and PeP

When you want to open the account, some banks ask you strange questions. The banks want to know, for example, whether you are a taxpayer in the USA or a politically exposed person. If you answer “yes”, some banks will not open an account for you. The background to this is, on the one hand, a US tax law called the Foreign Account Tax Compliance Act (Fatca). The US wants to prevent tax evasion. This also applies to German banks, they have to pass on data on the customers concerned to the US tax authorities. The politically exposed persons (PeP), on the other hand, are more likely to be involved in corruption, according to the Federal Financial Supervisory Authority (Bafin).

2. Joint account

In the case of joint accounts, several account holders can have one account, for example spouses. Not every bank offers its fixed deposit account as a joint account. If you want to use the account together with your partner, you have to pay attention.

3. Prolongation

Many banks don’t automatically give you your money back at the end of the term. Instead, they invest the credit again, again for the original term, but at the then applicable interest rate. With some banks you can exclude this automatic reinvestment in the application, with others in online banking. Other banks make it particularly difficult for you: You have to cancel the fixed-term deposit at the end of the term.

4. Taxes

If the system runs through a German bank or the German branch of a foreign bank, you don’t need to worry about taxes – the bank will do it for you. If you do not want taxes to be paid, you should send in an exemption request. However, since numerous foreign banks are now operating without a branch in Germany, customers with some providers have to take care of the taxes themselves and state the interest income in their income tax return.

When does a fixed deposit account make sense, and when not?

A fixed deposit account is suitable if you have savings that you can do without for a longer period of time. It is especially useful if you are planning a major purchase in a few years’ time or if you want to create a capital investment for buying a house or apartment. Because the money invested increases with little risk by the previously agreed interest until the time you really need it. Thus, a fixed deposit account is a low-risk investment for every investor.

For debtors and borrowers, the following applies first: First repay the loan before you make a time deposit. If you have taken out a loan in the past for which you are still paying monthly installments, you should first use the saved money to pay off the remaining loan amount before opening a fixed-term deposit account. As a rule, the interest costs of such a loan are significantly higher than the interest income that can be earned with a fixed-term deposit account.

How secure is a fixed deposit account?

At German banks, your deposits are legally protected at each bank up to an amount of € 100,000. Due to its good credit rating, Germany is rated AAA, which guarantees you as an investor a particularly high level of security. In many cases, German banks offer additional deposit protection that is above the legal minimum of € 100,000.

Paying out the fixed deposit account early: is that possible?

If you want to end the term prematurely, this is generally not possible at first. There are, however, a few exceptions:

The civil code leaves you a little loophole. According to the German Civil Code, you can terminate a fixed-term deposit early for an important reason. What exactly is your important reason is at the discretion of the bank and the courts. In recent years, the following have been identified as important reasons, among others:

  • if you slip into unemployment benefit II (“Hartz IV“)
  • if the bank is threatened with bankruptcy
  • in the event of the death of the account holder

In addition, it is theoretically possible that a right to termination is stipulated in the specific terms of the contract for a fixed-term deposit account. However, the right to terminate a fixed-term deposit account is rarely granted. In principle, in every contractual relationship it is of course also possible for both sides to agree on an early termination. Furthermore, there is the possibility that a bank accepts an early termination as a gesture of goodwill. However, this is currently very rare. When a termination is possible for reasons of goodwill, there is therefore no general answer.

What is the consequence of a termination? Normally, if you terminate a fixed-term deposit account, you will not receive any interest income or you will even have to repay any interest you have already received. The regulations differ depending on the bank; in the event of early termination, you generally have to expect severe losses.

How do you open a fixed deposit account?

In order to be able to open an investment account with fixed-term deposits in Germany, you must meet the following requirements:

  • Of legal age
  • Residence in Germany
  • In the vast majority of cases, a reference account is required for the inflow of funds. Sometimes a reference account is required at the same bank with which the overnight money account is kept.

If you are not yet a customer of the bank you want, you need to identify yourself. This is usually done using the post or video identification process.

fixed deposit account

The best online comparison tables for a fixed deposit in Germany

How to use the comparison table

Simply fill in these options:

  • Investment amount (Anlagebetrag)
  • Investment period (Anlagedauer)
  • Country rating (Länder Rating)
  • Deposit insurance (Einlagensicherung)

Results of the comparison

You will get the best 4 fixed deposit accounts in Germany

  • + The 3rd column tells you if the amount in insured in Germany
  • + The 4th column tells you the Return
  • + The 5th column tells you the field

Frequently Asked Questions (FAQ) about fixed deposit accounts

What are the advantages of a fixed deposit account?

In a fixed deposit account, you invest a certain amount at the beginning of a fixed term. You will receive guaranteed interest on the specified amount. The advantage of fixed-term deposits is the low risk of this asset class.

Are fixed-term deposits profitable?

Due to the very low risk of this asset class, the interest rates are lower than for other asset classes. If you’re looking for more return, you should look at other asset classes.

How is the fixed deposit accounts and overnight money accounts different?

With the fixed-term deposit asset class, you decide to lock up your money for a fixed period of time. During this period you usually do not have the opportunity to access this money, so it is firmly invested. You can, however, have permanent access to overnight money.


Best overnight money accounts in Germany for savings

Expaturm aims to help educate Expats in Germany on key issues that they will have to deal with while living in Germany by providing everything you need to know about Banking, Healthcare, Lifestyle, and Housing in Germany



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