Overnight money / hard money Comparison

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Call money / time deposit

Daily allowance and time deposit – Which investment forms are there?

The individually fitting form of investment depends on many factors. If you want to invest your money flexibly and collect interest, you can take advantage of the advantages offered by a call money account. However, if you can spare money in the medium term and want to invest it at a fixed interest rate, you can do so in the form of a time deposit.

The benefits of call money

If you want to invest a sum of money with a reasonable return and at the same time want to be able to dispose of the money whenever you need it, then a savings account is the perfect form of investment. The advantages of a call money account are obvious: They have no terms and therefore no notice periods and can look forward to a level of interest that exceeds the interest of a savings account by far.

In most cases, there are no costs associated with a call money account. This means that you will not be charged for any account or booking fees, nor for account set up or liquidation costs. In individual cases, however, it may happen that banks charge a fee for mailing the account statements.

Fixed term – advantages and disadvantages of investing

If you want to invest your money at a reasonable interest rate for a longer period of time and are confident you will not need the money over the set investment horizon, you may want to consider entering into a time deposit account. While overnight money can be subject to considerable interest rate fluctuations, the fixed interest rate is fixed for the duration of the investment. The investor already knows at the beginning what profit he can look forward to at the end of the term.

But what happens if the investor has to approach the money for unpredictable reasons during the term? It is possible to cancel the time deposit account if a special termination right has been agreed in the contract terms. However, a termination is subject to certain conditions. If the investor has no special right of termination, he can only hope for the goodwill of the bank. An early termination of the time deposit account can also cost the investor dearly, because the banks can usually reimburse the loss of profit in the form of a prepayment penalty.

Daily allowance and time deposit: why not both forms of investment?

As an iron reserve, fixed deposit is therefore not suitable. But what speaks against the combination of the two investment forms? Money that is not needed can earn interest on a time deposit account in the longer term. The balance is parked on a call money account. Again, there are good interest rates. But if you have to make unplanned purchases or carry out repairs, savers can always get their money.

The deposit insurance

With a fixed or overnight money investment you take no risk. Cash deposits are currently protected across the EU by so-called deposit insurance up to an amount of EUR 100,000 per customer and bank. Many banks also secure larger amounts.

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