Difference between revisions of "Germany/Banking/Savings"

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(Add FAQ.)
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=== Which type of saving account is right for me? ===
 
=== Which type of saving account is right for me? ===
  
* Money market deposit accounts (German: ''Tagesgeld'') are accounts where you add an withdraw money all the time.
+
It depends on how accessible your money shall be:
** But: their interest rate keeps changing all the time, too.
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* Fixed-term or fixed deposits (German: ''Festgeld'') have a fixed interest rate – but  you cannot get your money for the period that you did set it up for.
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* Money market (''Tagesgeld'') deposit accounts let you add and '''withdraw money all the time'''.
** Benefit: The interest rates are usually higher than on a ''Tagesgeld''.
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* Fixed-term or fixed deposits (''Festgeld'') let you access your money '''only after the term ends'''.
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However, fixed deposits usually offer a higher interest rate.
 +
 
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=== Are the interest rates fixed? ===
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* With money market accounts, the interest rate is not fixed. It can change from day to day.
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* Fixed-term accounts offer a fixed interest rate.
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=== Are interest payments taxed? ===
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* Yes, in Germany capital gains from savings accounts are taxed with the Withholding Tax (''Abgeltungsteuer'').
 +
* Basically, you pay 25% flat on your earnings.
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* However, there's an allowance of €801 per year. It means that if you earn less than €801 on interest payments, you pay no Withholding Tax on this sum. Only earnings above will be taxed.
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* When using a German bank for your savings, the bank automatically deducts your tax payments. If you want them to automatically respect your allowance,
 +
you can give them a exemption order (''Freistellungsauftrag'').
  
 
== List of Money Market Accounts (''Tagesgeld'') ==
 
== List of Money Market Accounts (''Tagesgeld'') ==
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== List of Fixed Deposit Accounts (''Festgeld'') ==
 
== List of Fixed Deposit Accounts (''Festgeld'') ==
 
{{FA-DE-Festgeldrechner}}
 
{{FA-DE-Festgeldrechner}}
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== See also ==
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* [https://germantaxes.de/tax-tips/capital-gains-withholding-tax/ Withholding Tax (Abgeltungsteuer) on Capital Gains] by ''[https://germantaxes.de germantaxes.de]''
  
 
{{Notes}}
 
{{Notes}}
  
 
[[Category:Banking]]
 
[[Category:Banking]]

Revision as of 13:25, 24 May 2022

Savings accounts pay interest on your money. There are two types:

  • money market account (German: Tagesgeld) and
  • fixed-term deposit account (German: Festgeld).

Frequently Asked Questions (FAQ)

Which type of saving account is right for me?

It depends on how accessible your money shall be:

  • Money market (Tagesgeld) deposit accounts let you add and withdraw money all the time.
  • Fixed-term or fixed deposits (Festgeld) let you access your money only after the term ends.

However, fixed deposits usually offer a higher interest rate.

Are the interest rates fixed?

  • With money market accounts, the interest rate is not fixed. It can change from day to day.
  • Fixed-term accounts offer a fixed interest rate.

Are interest payments taxed?

  • Yes, in Germany capital gains from savings accounts are taxed with the Withholding Tax (Abgeltungsteuer).
  • Basically, you pay 25% flat on your earnings.
  • However, there's an allowance of €801 per year. It means that if you earn less than €801 on interest payments, you pay no Withholding Tax on this sum. Only earnings above will be taxed.
  • When using a German bank for your savings, the bank automatically deducts your tax payments. If you want them to automatically respect your allowance,

you can give them a exemption order (Freistellungsauftrag).

List of Money Market Accounts (Tagesgeld)

List of Fixed Deposit Accounts (Festgeld)

See also

Notes

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