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Time deposit comparison: How to do it right
F or investors wishing to invest capital as a fixed-term deposit, it is important to find out about the current prevailing interest rates and filter out the best offer. For this purpose, there are numerous platforms on the Internet that compare and evaluate various fixed-term deposit offers. These include such well-known names as Check24, Finanztip, Verivox, Focus and, of course, Stiftung Warentest, which enjoys a particularly high reputation among consumers. Thus, it is possible for every private investor to evaluate fixed-term deposits in comparison.
Almost all providers proceed similarly in their comparisons: They check the interest rates offered at different maturities of the time deposits. Mostly these are 1 month, 3 months, 6 and 12 months and 1, 2, 3 and 5 years. In normal interest rate phases, the rule of thumb applies: The longer the term of the time deposit, the higher the interest offered. As a second step, the comparison platforms look at the respective creditworthiness of the offering financial institutions. Often, only those institutions that are top-rated by Standard & Poor’s, Fitch and Moody’s are filtered out. In addition, the comparison platforms also examine whether the banks or their subsidiaries are subject to the European deposit guarantee of 100,000 euros. In addition, the assessment also takes into account whether there is a voluntary deposit insurance scheme in addition to the statutory one.
Some platform providers also evaluate the service offered by individual financial institutions. For example, Focus weights the 3 categories of the fixed-term deposit offer with 70% in the area of “yield” with 20% the area of “deposit protection and with 10% the category “service”.
Choosing the right time deposit provider
Genève Invest can provide 4 tips for choosing a fixed deposit provider:
- Term and termination
In general, the term should be selected so that the invested money is certainly not needed during the term. It is also essential to clarify whether and under what conditions early termination is possible. It should also be clear whether it is necessary to terminate the fixed-term deposit at the end or whether it will be automatically extended without termination.
- Offers from abroad
Fixed-term deposits can be invested not only in Germany, but also abroad. Often banks abroad offer slightly higher interest rates. Within the EU, the security of the time deposit is guaranteed up to 100,000 euros in a very similar, EU-harmonized way. However, the respective country creditworthiness also plays a role and should be taken into account.
- Interest distribution
When choosing a time deposit provider, the investor should pay attention to how the interest is distributed. In the long run, it makes sense to have the option to include the interest due before expiration in the fixed deposit amount so that the investor can enjoy compound interest. If this is not possible, the loss of purchasing power despite interest payments due to inflation should also be taken into account.
- Offer details
The offer details should include information on the term and interest payment. It should also be mentioned when exactly the posting of the interest credit takes place. Also a minimum investment amount and possibly a maximum investment should be mentioned as well as, as explained above, the cancellation or automatic renewal.
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Conclusion on the topic of fixed-term deposits in comparison
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n summary, time deposit comparison platforms are a good help, as they can also filter out fraudulent offers and make the time deposit investor aware of the most important points when selecting a time deposit offer. However, the investment of money is always a sensitive and usually very individual topic, which often depends on accompanying life circumstances and the personal needs of each investor. And this, of course, cannot be taken into account by the comparison platforms.
Take 2 hours of your time and schedule a no-obligation consultation with one of our experts, who will analyze your current situation and discuss possible decisions with you.