Investment: types, accounts, advice
Investment – An investment is made when there is an amount left over after all monthly expenses have been deducted. You can transfer a one-time amount into a cash investment, or you can opt for regular monthly payments. Banks and savings banks offer various forms of cash investment. These differ primarily in their availability. The aim is to earn interest on the money.
Financial investments: savings account, call money and time deposit account
In addition to traditional savings accounts, you can also opt for securities as an investment. The interest rates are higher. The disadvantage, however, is that you cannot count on the money so well. You do not know in advance how the interest rates will develop, because they depend on the prices on the capital markets. In contrast, the classic investment of money in the form of a savings account, a call money or a fixed-term deposit account can be calculated exactly in advance. However, the interest rate can be significantly lower than if you invest in shares or securities.
Pay attention to the availability of the investment
If you have saved reserves for the purpose of construction financing, it is advisable to coordinate the investment of funds with your planning. This applies in particular to investments in securities and fixed-term deposits. The capital will not benefit you if it is not available on the due date. If you liquidate cash investments prematurely, you will often lose some of the interest or be charged fees.
Investing money from the sale of real estate in a financial investment
Similarly, you can transfer money you receive from a property sale into an investment. This is possible in the short or long term. Since most banks no longer pay interest on funds held in a current account, it is advisable to transfer funds that are not needed immediately from the current account to an investment. With the large amounts you get for selling a property, even low interest rates have a positive effect and you can make a positive profit. If you would like individual advice on financial investments to be used in connection with the sale or purchase of a property, we would be pleased to offer you our services.
Shares and securities are considered a flexible and very profitable investment. You can buy individual shares, or you can decide to invest in a fund. In this case, different shares are grouped together. The fund is managed by experts. In principle, you can buy or sell shares at any time at the current daily price. However, always keep an eye on the development of the increase in value. Also take into account that the securities account is subject to charges at many credit institutions. Furthermore, the purchase price of a share is higher than the issue price.
Value development: consider risk in calculation
In contrast to a classic savings investment, the performance can go down as well as up. You should also take this into account in your calculation. Compared with other financial investments, you can achieve the highest returns by investing in shares and securities. However, this may take some time. Knowledge of the market is an advantage. If you want to save money for a construction loan, stocks and securities are only a good choice if you plan for the long term. Short-term gains are theoretically possible. However, unlike the classic fixed investment, they cannot be planned.
Fixed investments with classic interest rates
A fixed-term deposit has a specific term. The interest rate is also fixed, so you know in advance how much money you will have available at the end. This is an advantage for construction financing. The disadvantage is that interest rates are at a consistently low level. This is especially true for cash investments with a short term. Also take into account that you usually do not have access to the money during the fixed period. You can terminate a fixed-term deposit in the normal way. However, you must observe notice periods of up to a quarter of a year and you will lose part of your interest.
Per diem account: Advantages, disadvantages, interest
You should only deposit money in a call account if you need it at short notice or do not know exactly when the withdrawal is necessary. Overnight deposit accounts are often linked to the current account. Transferring the money and returning it to the checking account usually takes one banking day. The advantage is the immediate availability of the money. The disadvantage is the low interest rate.
Real Estate Loan
A construction loan differs from the classic consumer loan by the more favourable interest rates and the longer term. The property serves as collateral for the financing. The debt is entered in the land register. If the instalments cannot be serviced on time, the bank has the right to terminate the property loan and pursue foreclosure. In this case, it gets back its money or a large part of it. Thanks to this deposited collateral, the bank has the possibility to grant more favourable conditions for real estate financing than for a consumer loan granted without the deposit of collateral.
