One of the headlines last week was the announcement of the decision of the European Central Bank (ECB) to lower its key interest rate from the previous 0.25% to a record low of 0.15%. This step had been long awaited by many financial experts and therefore hardly surprised. The reason for the renewed interest rate cut is the promotion of the economy in Europe.
As much as this step may be important for the economy, the lowering of the base rate hits the individual saver, because this gets less and less interest in his investments and his retirement. In more and more areas, the returns on investments no longer cover the purchasing power losses due to the already low inflation rate. In many cases, therefore, even a “creeping expropriation of savers” the speech. Although savers are increasingly looking for profitable and up-to-date investments, the investment landscape is only slowly changing. Here is an overview of the 10 most popular investments of the Germans.
Statistically, there is a per capita wealth of around 115,000 euros in Germany, with the largest part remaining in traditional investments. Despite barely appreciable interest rates, the classic savings account is still the most widespread form of investment among German investors. In 2013, about 64 percent of all German savers used this classic form of investment and entrusted a large portion of their money to a savings account.
Second rank real estate. Homeownership offers a piece of financial security in old age and is considered by 23% of Germans as a popular form of investment. Since home ownership is promoted by government support programs for old-age insurance and last but not least to loan with low interest rates are beneficial, this area is likely to gain more importance, which, however, will drive up real estate prices.
Although the financial investment is no longer as lucrative as a few years ago, the fixed-term deposit is still very popular with us and ranks with 20% in the hit list of the most popular investments in third place before overnight money, for 2013 , about 16% of investors decided. With the recent cut in the key interest rate, yields will likely continue to fail. In any case, investors should use the flexible investment in overnight money to provide around two months’ salaries with, albeit small, returns. This saves you from having to resort to a costly credit line in the event of an emergency.
Fifth place in the popularity list according to the Wealth Creation Act funded by the employer premium savings contracts. Savings bonds, the classic of the premium savings contracts, are fixed-income investments with longer terms of up to 10 years. These are even lendable and enjoyed the confidence of around 9% of investors in 2013.
Around 8% of Germans use the very interesting, but also speculative investment form of acquiring shares in open and closed investment funds, which thus occupy sixth place. In particular, equities are considered highly speculative investments due to price volatility, but equity and equity fund investments are now on the rise. After all, 9% of investors already trusted in the performance of corporate bonds, at least in part, in 2013.
Since it also includes employee shares issued by some companies to their employees at a reduced rate, this form of investment only holds 7th place with 9%. Precious metals, jewelery and gems are in the back seats. Although financial experts repeatedly advise that precious metals such as gold, silver and platinum belong to a healthy investment mix, this form is still relatively little used, which is why it is only the 8th place in the popularity scale, even before the rear lights jewelry and diamonds.
Conclusion: The hit list once again makes clear that German savers are particularly safe, which is why speculative investments still play a rather subordinate role.
However, the latest developments are likely to lead to rethinking and focus on equities, equity funds and real estate funds. Since the topic of stocking is becoming more and more popular, I will soon be devoting my own article to it, which you may already look forward to.