guckuck2
2023-02-10 10:33:31
- #1
An important consideration for the investment here is whether you are putting the money down for a longer period (5, 10 years) or initially aiming for 3, 6, or 12 months, since the current trend for interest rates is still slightly upward. For example, in Sept. 2022 we invested 100k for 12 months at 0.75% (equity for the house construction which we only need again from Sept. 23 onwards) and meanwhile we would get 2.2% for the same term. Perhaps one could also split it: invest 50% of the capital long-term immediately and use 50% of the capital for this short-term strategy until an interest rate level is reached that one believes (though that does not mean knowing) is now "high enough” and then also invest over several years.
An interesting point. The 5 years were used in the example because from then on the special termination right in the mentioned loan approximately applies. However, you have to consider both directions, for example, currently 4 years fixed deposit also yield 3.4%. You might think that longer interest rate locks get you higher rates – that is not necessarily the case. But you can also look at it as securing this interest rate and also benefiting from it in the fifth year. As always, the question is: what changes do you expect in the interest rate?
Regarding splitting. A fixed deposit ladder is recommended here. You divide your investment amount into, for example, 5 equal tranches and invest one for one year, another for two years as fixed deposit, and so on. This naturally leads to a mixed interest rate that is rather lower than locking the entire sum for the longest term. The advantage, however, is that each year you can newly decide what to do with over 20% of the investment amount, whether and how it should be reinvested.
The calculation with 3.4% sounds nice but where do you get this interest rate? The typical comparison sites on the internet list "shady" banks I’ve never heard of. Ing-Diba is still advertising 2.25% for 5 years.
I quite like the comparison at biallo. Currently, abcbank and Bank11 can be found there with 3.4% for 5 years. Both banks have triple-A ratings and are based in Germany. The deposit guarantee (100k) is identical throughout the EU anyway. If you don’t know them ;-) the next in line would be pbbdirekt with 3.25%, at least you might have heard about them before. "Knowing" is, in my opinion, an unimportant factor; in foreign industries you generally only "know" the market participants who stand out through massive advertising or branches. But that is usually just the tip of the iceberg. The important question is whether they are reputable or if there is a risk when you want to store your money there, for example.