Security of the time deposit investment

Fixed-term deposits have always been considered a particularly safe investment product. Nevertheless, in certain cases risks can also arise with fixed-term deposits. If you invest amounts that exceed the state-guaranteed deposit guarantee, the amount exceeding the guaranteed sum could be lost if the bank goes bankrupt. However, this risk is rather theoretical, because so far in the euro area, with few exceptions and unlike in the US, all banks have been saved from bankruptcy by the respective states. There is little to suggest that this could change in the foreseeable future.

Much more real than the bankruptcy risk is the currency risk if you invest your time deposit in a foreign currency. If the exchange rate of the foreign currency has fallen against the euro by the maturity date, your time deposit will lose value or purchasing power in euros. In the opposite case, you can also profit from the foreign deposit, but bear in mind that in the worst case, exchange rate fluctuations not only eat up your return, but also lead to real losses.

Opening a time deposit account

Like any other account, you can open a time deposit account either at a branch of your bank or online. Before you sign the contract, you should first check the general terms and conditions and clarify any open questions. While an account is opened relatively quickly at a branch bank, it takes a few days at a direct bank because the bank first has to verify your identity.

After you have filled out and submitted the account opening application online, you will receive the opening documents together with a Postident form from the direct bank after one to two working days. Present this form together with your identity card at a post office of your choice. The postal employee will check your identity and then transfer the ID data to the form. After you have signed the form, it will be sent to the bank. If all the information is correct, you will receive the account number and your access code from the direct bank after a few days.

Three steps to a Direktbank fixed-term deposit account

•     Fill in and send the account opening form online
•     Wait for the bank to send you the opening documents
•     Have your identity verified via Postident

What is the right investment period?

Fixed-term deposits are invested for a contractually agreed period. Unlike call money, you cannot freely dispose of it during the investment period. You should therefore only invest the amount of money as a fixed-term deposit that you will definitely not need during the term, because extraordinary termination is only possible under very specific conditions. When investing money with Exness multi-asset broker, it is generally recommended not to invest your entire capital, but to keep a reserve available at all times in order to be prepared for extraordinary occurrences such as accidents, illness or unemployment.

The minimum amount and term of time deposits differ from bank to bank. With some institutions you can already invest an amount of 500 euros as a time deposit, with others this is only possible from 2,000 euros. The investment periods range from a few months (at direct banks) to ten years. However, the breadth of the offer is largely dependent on the interest rate trend - in times of falling interest rates, the offers are usually less broadly spread. If interest rates are rising, however, you will tend to find more offers for fixed-term deposits.