The savings certificate is a one-time investment with a bank, with which you invest a sum of money for a specific term of one to ten years at a fixed interest rate. A savings bond is therefore a fixed-interest form of investment. This means that the money is invested for a fixed term. With a discounted or compounded savings bond, you do not receive any annual payments, but you do receive a larger amount at the end of the term.
The conditions vary greatly from bank to bank. Basically, in times of high-interest rates, savings bonds are offered with very high-interest rates and vice versa. If interest rates fall in general, savings bonds also become less attractive.
Fixed-term deposit vs. savings bond
A fixed-term deposit account works just like a savings certificate: statutory deposit insurance and fixed interest rates over the entire – fixed – term. With our fixed-term deposit comparison or fixed-term deposit calculator, you can quickly and specifically find the fixed-term deposit accounts – and of course, also selected savings certificates – with the highest interest rates:
Other Fixed Deposit Accounts
You can find more fixed-term deposit accounts with the corresponding conditions in our detailed fixed-term deposit comparison. Just click the button and off you go!
Calculate fixed deposit interest
Finding the right time deposit account is made easy! With our fixed deposit calculator, you can quickly reach your goal with just a few clicks.
As with fixed-term deposits, the interest rate for savings bonds does not change during the term. So you should also prefer a shorter term for savings bonds in times of low-interest rates. The minimum investment amount is usually between 500 and 2,500 euros. The investment period can range from one year to ten years, and the interest rates generally rise the longer the selected term of the savings bond is.
Pros and cons of savings bonds
advantages
- safe investment
- Interest rate is guaranteed for a long time
- Savings bonds can be encumbered
- Choice in relation to the payment of interest
disadvantage
- Relatively low-interest rates and low returns compared to other savings investments
- lack of flexibility (money is tied up for a certain period of time and not freely available)
What is a Savings Certificate?
If the investor has bought a savings certificate, he will receive a certificate containing the following data:
- Face value (the amount invested or withdrawn)
- Date of payment (usual terms are between one and ten years)
- Nominal interest (interest on deposits)
- type of interest
- Information about transfer or assignment (this can be completely excluded or only possible to a limited extent)
What is the face value?
The face value or nominal value is the printed value of savings bonds or other securities such as stocks, corporate bonds, or federal Treasury bills. In the case of securities traded on the stock exchange, the nominal value should not be confused with the market value. The market value is the current trading price, depending on supply and demand, the market value can differ significantly from the face value.
How secure is a savings bond?
In general, it can be said that savings bonds are theoretically very safe products since they offer relatively solid interest on the investment and the interest is fixed. In addition, there is no price risk because savings certificates are not traded on the stock exchange.
Of course, there are also savings bonds that differ significantly from this ideal type. We would like to introduce them to you below:
There are savings bank letters issued directly to a person and bearing their name. Such a savings certificate is treated like a savings account. This means that this savings bank letter falls under the protection of deposit insurance.
The savings banks are all part of the liability association of the savings banks finance group. This secures all savings, term, and demand deposits as well as securitized claims. The level of security is far higher than that required by law in Germany because all customer deposits whose credit institutions are members of the savings bank financial group liability scheme are 100% secured to an unlimited extent! If the savings bank were to go bankrupt, bearer bonds would be serviced from the bankruptcy estate.