With a time deposit, savers invest their money for an agreed period. In return, the bank offers a certain interest rate, which - depending on the amount invested and the term - may be higher or lower. If you opt for a fixed-term deposit account, you also opt to forgo your money for the agreed period. Early termination is usually not possible, after all, you put your money in a fixed deposit account fixed an.
You should therefore only invest amounts in a fixed-term deposit account that you do not need for the selected period. Flexible withdrawals as with overnight deposits are therefore not possible, but you usually receive significantly higher interest rates. The general interest rate trend determines the interest rate level - for both overnight money and fixed-term deposits. This interest rate level is set by the European Central Bank (ECB) with its key interest rates.
Important: As a saver, you can also help determine the interest rate on your fixed-term deposit: The longer you invest your money on a fixed basis, the higher the interest rates will normally be.
Banks and savings banks offer investment periods of between one month and ten years for fixed-term deposits. Due to the high inflation rate, we currently recommend shorter terms of up to three years, as the development of interest rates is currently very dynamic.
So that you do not spend your money just then for a long period of time fixed If you want to invest more money when interest rates rise again, we advise you to invest for a maximum of 12 to 24 months. Incidentally, from a fixed-term deposit of more than four years, the term usually has little or no effect on the interest rate.
With a time deposit, the interest rate is fixed for the entire term, which is a major advantage over a call account. This makes time deposits much easier to plan than, for example, stock market investments or overnight deposits.
However, this can also have disadvantages: If interest rates rise while your money is in a fixed deposit, you cannot switch the money to a better-interest investment. Although some banks offer to close the time deposit account early, this results in high interest losses. Fixed-term deposits are relatively inflexible - that's the price savers have to pay for a higher and guaranteed return.
Interim Conclusion: Fixed-term deposits are just as safe as overnight accounts, but much less flexible. On the other hand, savers receive higher interest rates. You can influence this yourself via the term and investment amount.
The interest rates for time deposits are comparatively high. From a term of just one year, a fixed-term deposit generally yields higher interest than a call account. For a term of five years, some providers reward their customers with 0.85 percent interest - in our Fixed Deposit Comparison below you will find our recommendations.
In addition to acceptable interest rates, a fixed-term deposit account is particularly convincing in terms of security: the interest rate is stable over the term, the investment can be planned exactly, and the invested capital is also protected against possible payment defaults by the bank via the deposit guarantee.
The Compensation Scheme of German Banks (EdB) protects deposits of up to 100,000 euros per person and bank. Private banks that also belong to the protection fund of the Association of German Banks (BdB) even protect deposits in the millions. You can find more information on this at depositinsurance.com.
At banks based in other EU countries, up to 100,000 euros per person and bank are also protected thanks to the European Union's state deposit guarantee. Countries that are part of the EU but do not use the common currency, the euro, may be exceptions.
Important: The UK compensates the equivalent of 85,000 pounds, which was the equivalent of slightly less than 100,000 euros at the beginning of April 2023. The Swedish deposit insurance scheme also protects only 1,050,000 kronor in the event of a bank failure. At the beginning of April 2023, this corresponded to an equivalent value of around 92,000 euros.
Tip: Invest a maximum of 100,000 euros in savings accounts at the Swedish financial institutions Hoist Finance, Nordax Bank, Klarna Bank or TF Bank and keep an eye on the exchange rate between the Swedish krona and the euro.
A time deposit account is ideal for savers who are looking for a safe investment and can invest their money on a fixed basis over a longer period of time. Our Fixed Deposit Comparison shows that the interest rates on a fixed-term deposit account are higher than on an overnight deposit account. Nevertheless, savers still only receive less than two percent interest per year on their time deposit accounts with reputable providers.
In the search for high-yield investments, many people are therefore increasingly opting to invest money on the stock market as an alternative or supplement to safe fixed-term deposits. In addition, lesser-known investment opportunities, such as crowdinvesting, are also worth a look.
The concept of crowdinvesting is simple: several investors (the so-called crowd) jointly finance a selected project and receive a financial share for their investment. This project ranges from a simple start-up to real estate projects or ecological projects.
A real estate crowdfunding investment is interesting due to the increasing demand for housing and can, for example, be made via brokerage platforms such as Bergfürst*, Interest module* and Exporo can be realized. Exciting start-up investment opportunities can be found, among others, at Companisto*.
Tip: Compare the various providers with regard to possible costs incurred, the minimum investment amount and the investment term if you decide to make such an investment.
Important: In a direct comparison with investing money in a fixed-term deposit account, crowdinvesting stands out for its higher interest rates and flexible terms. However, there are also strong differences between these two forms of asset accumulation with regard to the security of your capital. Be aware that with crowdinvesting (similar to many stock market investments) there is always the risk of a total loss. Anyone considering crowdinvesting as an investment alternative should be able to deal with losses and additionally use alternative ways of investing for wealth accumulation.
Investors looking for an alternative or supplement to fixed-term deposits can supplement their financial investment with a traditional investment in a real estate fund - thus further spreading the risk. At hausInvest* invest your money in a particularly diversified way - especially in low-interest phases or turbulent times on the stock market, tangible assets offer convincing stability.
Important: The open-ended real estate funds hausInvest* invests in high-quality commercial real estate at economically strong locations in Europe and worldwide - inform now!*
It is questionable whether deposit protection really works in all countries. In the event of a serious systemic crisis in the banking sector, not all bank deposits would be protected, and the protection systems in Germany would probably also reach their limits. You should therefore only ever invest your money with solid banks in solvent countries - this is the only way to really play it safe.
Our comparison of fixed-term deposits therefore also takes into account the creditworthiness of the financial institutions. Our evaluation is based on the ratings of the three most important agencies Moody's, Standard & Poor's and Fitch, as well as the location of the financial institutions.
Our recommendation: We only advise banks that, in addition to a good rating, are also based in an economically sound country, for example in Germany or France.
Before you take a closer look at our comparison and open a fixed deposit account, you should consider the most important rules of investing money: Repaying debts should always be a priority, because: As a rule, the interest you get on your fixed deposit is lower than what you have to pay on existing loans. And: only invest the money that you can really do without. You should still have reserves or at least a "nest egg" in case unforeseen expenses become necessary, such as repairing your car. You can find more tips on your finances in our guidebook Investment.
In our comparison of fixed-term deposits, we found the following: Not every offer is actually recommendable, however tempting it may sound at first glance. In particular, you should always check overnight money or fixed-term deposits advertised by direct banks and Internet portals for security aspects and not be dazzled by high interest rate promises.
Comparison portals such as Check24 or Verivox often offer many different banks from many different countries. Unfortunately, the portals also list financial institutions that do not make it into the selection due to our strict selection criteria: For example, Ferratum Bank and Fimbank from Malta, the Romanian Alpha Bank and the Latvian Rietumu Bank repeatedly appear on the portals. Even though the latter bank is even rated as a "performance recommendation" by Check24 in the category "fixed-term deposits without minimum investment", we do not recommend these banks. We do not consider an investment there to be sufficiently safe, among other things because of the country ratings: Latvia receives an "A+" rating from Standard & Poors and Malta only an "A-" rating, Romania even only a "BBB-" (as of July 01, 2021).
We also advise against time deposit offers from Liechtenstein. The country is not a member of the European Union, and in the event of a bank failure, depositors will receive 100,000 Swiss francs - which is significantly less than 100,000 euros.
As a rule, you have to invest a minimum amount for a time deposit. The majority of banks and savings banks require a minimum investment of 1,000 and 2,000 euros, and some institutions even require savers to invest at least 10,000 euros. This minimum investment is usually independent of the term and the interest rate.
Some (few) providers do not impose any requirements for the amount of your deposit, you as a saver can keep these time deposit accounts with any amount. However, keep in mind that the interest income (and thus the success of the investment) is measured by the amount of your capital.
In our comparison of time deposits, we have focused on the amount of interest. However, as you have already noticed at the beginning of this article, we nevertheless indicate the amount of the minimum investment in our Fixed Deposit Comparison so you can quickly filter out the right offer for you and your investment goals.
The decisive factor for the best fixed-term deposit offer is the interest rate in relation to the minimum investment period, i.e. what return do I receive as an investor over what term? In the following, we have taken a detailed look at the offers with the highest interest rates.
The interest platform zinspilot.com* provides overnight money and time deposit offers from banks in Germany and Europe. It is worth taking a look at these offers, as many banks often only offer low interest rates.
Zinspilot cooperates with the Hamburg-based private bank Sutor Bank. Savers must first set up a clearing account there.
Once the clearing account is set up, you can choose the bank for your overnight deposit or time deposit account - you do not need to open another account.
Deposit insurance conditions apply at the bank where you ultimately invest the money. Since zinspilot.com* also lists banks from countries whose economic strength is often rated as poor by rating agencies, you should choose your provider carefully.
The French Crédit Agricole* offers savers 3.10 percent interest p.a. on the time deposit for an investment period of one year. The investment amount must be between 5,000 and 500,000 euros. The interest is paid annually to the selected reference account. The invested capital is protected by the French deposit guarantee up to EUR 100,000 according to the EU directive.
At the French Younited Credit* offers interest of 2.95 percent p.a. in April 23. Younited Credit requires a minimum deposit of 2,000 euros; savers can invest up to 100,000 euros.
Important: Investors should note that it is not possible to deposit an exemption order with Younited Credit. The interest must therefore be declared in the tax return.
With a maturity of one year, investors in the Swedish Klarna Bank* 2.57 percent interest p.a. Investors should note the minimum deposit of 5,000 euros. The maximum deposit at Klarna Bank is 500,000 euros.
Important: The Swedish deposit insurance covers an amount of SEK 1,050,000. This is currently (as of April 2023) only approximately equivalent to the euro countries' deposit insurance of 100,000 euros. Savers should therefore always keep the currency risk in mind.
The SWK Bank* offers 2.55 percent interest for a one-year term, which is transferred annually to your online savings account at SWK Bank. This puts the German bank among the best tested financial institutions in this category of our fixed-term deposit comparison. Additionally, SWK Bank accepts investments up to an amount of 250,000 euros. You have to make a fixed deposit of at least 10,000 euros and the deposit guarantee is 100,000 euros.
Crédit Agricole* is also ahead in the case of an investment period of two years. The French bank pays a strong 3.50 percent p.a. interest on savers' balances in this category.
The French Younited Credit* also offers attractive fixed deposit interest rates for a two-year term. Savers receive an annual interest rate of 3.25 percent, and the minimum deposit here is also 2,000 euros.
The Swedish credit institution offers comparably high interest rates of 2.92 percent per annum. Klarna Bank* offers - as already mentioned above - the time deposit account from an investment amount of 5,000 euros.
In our comparison of the best fixed-term deposit accounts for an investment period of two years, the German SWK Bank* also performs well. At 2.75 percent annual interest, the credit institution offers an extremely attractive deal in this category. SWK Bank* offers the time deposit account from an investment amount of 10,000 euros.
At the French Crédit Agricole* investors receive 3.60 percent interest p.a. on the time deposit. Investors should note that a minimum deposit of 5,000 euros is required. As can be seen in our test, Crédit Agricole also pays 3.30 percent interest p.a. for an investment period of two years. So if you prefer a shorter investment period in order to be more flexible, you can do so with Crédit Agricole at the same conditions.
For a fixed-term deposit over three years, you will receive at the Younited Credit* 3.35 percent interest per year - that's enough for first place in this category, too.
With a time deposit account at the Klarna Bank* you as a saver receive 2.92 percent interest per year for a term of three years. This means that the Swedish bank also offers attractive conditions in the test of the best fixed-term deposit accounts for a term of three years. Klarna Bank accepts - as already mentioned - investment amounts of up to 500,000 euros and transfers the interest annually.
The Crédit Agricole* offers customers 3.60 percent interest p.a. with a term of four years. The interest on this fixed-term deposit account is paid out annually to the reference account selected by the customer.
In first place with an interest rate of 3.45 percent p.a. is the Younited Credit* in the fixed-term deposit interest rate comparison for a four-year term. A maximum of 100,000 euros can be deposited in the Younited Credit fixed-term deposit account.
The Swedish Klarna Bank* offers the fixed-term deposit account with a four-year term at slightly lower interest rates than its French competitor. Here it is 2.92 percent p.a.
The highest interest rates in our fixed-term deposit comparison are offered by Crédit Agricole*. This offers customers 3.60 percent interest p.a. with a term of five years. Investments of between 5,000 and 500,000 euros are possible with this fixed-term deposit account.
For investors willing to invest capital for five years, the Younited Credit* an attractive way to do this. The interest rates for a five-year time deposit are as follows 3.50 percent.
*This is what the asterisk means: Our guidebook articles are objectively researched and independently produced. We want to help as many people as possible to build up their own assets and make the right decisions in financial matters. In order to make our information available free of charge, clicks on links are sometimes remunerated. We mark these so-called affiliate links with an asterisk. Money is paid to finanzen.net GmbH, but never to the author individually, if readers click on such a link or conclude a contract with the provider. Whether finanzen.net GmbH receives remuneration and in what amount has no influence on the product recommendations. The only thing that matters to the Ratgeber editorial team is whether an offer is good for investors and savers.
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