German savings accounts are investments with no fixed term that are usually based on a variable interest rate. Passbook savings accounts are probably the best-known form of savings account.
Savings accounts are intended for investing and accumulating money and may not be used for daily payment transactions. Savers receive a savings document (Sparurkunde) from their bank for their savings account. This is traditionally a passbook in which the deposits and withdrawals are entered. If you wish to withdraw money from a savings account, you usually have to present the passbook. Furthermore, the contractual agreements normally also contain a clause entitling the bank to disburse funds to anyone presenting the passbook. A savings card can also serve as an alternative to the passbook and fulfil the function of the savings document. In practice, the savings card is increasingly replacing the passbook.
Savers receive an interest return that is geared to the market interest rate, amongst other things. The interest rates vary from institution to institution, and may be adjusted by the banks at any time.
Interest rate example
If the interest rate is 0,01 % p.a. and you deposit 10,000 euros on your savings account, after one year you will receive 1 euro in interest.
To terminate a savings account, you must give notice of at least three calendar months. It is usually possible for savers to withdraw up to 2,000 euros per calendar month if no withdrawal notice has been given for a savings deposit that is subject to the three-month notice period.
For which customers are savings accounts best suited?
Savings accounts are suitable for investors who prefer a conservative, safe investment in order to accumulate reserves and who do not require the flexibility of a call deposit account.
Is there any kind of protection for the money held in my savings account?
In Germany, the statutorIn Germany, the statutoryy deposit guarantee schema protects saving account balances and other customer deposits up to 100,000 euros per customer and bank in total. All EU member states have implemented the relevant EU Directive and established statutory compensation schemes that are intended to offer comparable protection. If the statutory deposit guarantee is of importance to you, you can spread the investments over several institutions if your capital exceeds 100,000 euros
Alongside the statutory deposit guarantee, the banking associations in Germany have set up voluntary deposit guarantee schemes. These offer customers the prospect of further compensation over and above the statutory deposit guarantee – albeit with no legal entitlement.
When can I withdraw the money from my savings account?
For savings deposits with a notice period of three months, you can usually withdraw up to 2,000 euros within a calendar month. Normally you can withdraw the interest accrued within two months after it has been credited to your savings account, regardless of the amount of interest earned and the notice period. After this, the interest payments are subject to the notice of withdrawal rules stipulated by the bank.
Otherwise savers are not entitled to a premature repayment of the savings deposit. If you wish to withdraw more money, you must give notice of withdrawal for this partial amount. When giving notice of withdrawal, you must observe the notice period specified by the bank (at least three months). At many banks, it is possible to withdraw higher amounts without observing the notice period. However, if you do this the bank will demand an interest penalty for premature withdrawal (Vorschusszinsen). The interest penalty is charged for the part of the withdrawal that exceeds the maximum monthly amount.
Where can I open a savings account?
You can open a savings account at a credit institution. Information and advice can be obtained at the branches, online or by telephone at the respective provider. Give careful thought in advance to how long and for what purpose you intend to invest your money and examine the conditions thoroughly.
What information must the credit institution provide me with?
All German credit institutions are required, amongst other things, to inform their customers of the particular features of their products and the corresponding prices. Information on how much a bank charges for a savings account and how much interest it pays can be found in the bank’s schedule of prices and services. The current interest rate is stated on a noticeboard at the bank branches, for example.
In addition, at the time of signing the contract and in yearly intervals after this, all credit institutions are required to inform their customers of the applicable terms of the statutory deposit guarantee.
Which obligations must I fulfil as savings account holder?
You are obliged to store the savings document in a safe place. You must immediately check that entries in the passbook or on the account statements are correct and raise any objections without delay.
Are the returns on a savings account subject to taxation?
The interest credited to your savings account by the credit institution classifies as investment income and is therefore subject to taxation. In order to benefit from tax-free allowances, you can apply for a tax exemption at your credit institution.
In what way are providers of savings accounts supervised?
Domestic banks require authorisation from BaFin for conducting deposit business if they want to offer investments in the form of savings accounts. German banks are supervised by the Deutsche Bundesbank and BaFin and, if they exceed a certain size, also by the European Central Bank (ECB) within the scope of solvency supervision.
