Is the better alternative to day money deposit? Call money and term deposits are among the most popular investment products of the Germans for some time. It is too easy: most day money or deposit account can be opened with the opening of a current account is also equal to a free and you’re ready to go with the Save. But what is the better alternative, federal funds or deposit? Fixed-term deposits appear particularly attractive at first glance: await you with the higher interest rate and it is clear from the outset, which yield is expected at the end of the engagement. But this security has its price: often higher amounts must be applied for fixed-term deposits, at least 2,000 5,000 euros. Alone this minimum deposit will hold many small savers of them to open a fixed deposit account. In addition: during the duration of which can vary from several months up to ten years, is on the money not accessible, the account cannot be resolved only in exceptional situations with significant degradation of interest itself. The best yields can be expected for a term between one and three years. For this period should be can abandoned the created money, in order to generate an optimal return.
Day money is not quite as high interest such as fixed-term deposits. The reason is that the deposits are available daily, and the Bank can therefore not so sure farming with customer deposits as it is the case for fixed-term deposits. This day money offers a high degree of flexibility. The downside: day money rates are usually only for a certain period of time, often six months. They are based on the usual market rates, then be adjusted accordingly. What sounds tempting in times of rising interest rates hurts even more in times of falling interest rates. Conclusion: Whether money is a better alternative depends on whether one can waive a certain amount of money for a certain period of time. Sebastian post.