Best Investment Methods in Germany 2023

 Best Investment Methods in Germany 2023

Best Investment Methods in Germany 2023
 Best Investment Methods in Germany 2023

Best Investment Methods in Germany 2023

The best investment methods in Germany are many of the maximum searched key phrases on Google currently. This is because Germany is one of the leading European countries in the field of investment, with a strong economy and a thriving business environment. 

Germany is also an interesting destination for investors seeking long-term profitable returns on their investments. In light of this, here is an article from my platform "Salyou" where we will review the best investment methods in Germany, which may help investors achieve their financial goals.

Best Investment Methods in Germany:

Here are the best investment methods in Germany:

  1. Investing in savings accounts.
  2. Investing in retirement plans.
  3. Investing inside the inventory market.
  4. Investing through social trading.
  5. Investing with lending.
  6. Investing in real estate.

Investing in savings accounts is one of the best investment methods in Germany.

Investing in savings accounts is one of the best investment methods in Germany. Investing money in savings accounts in Germany provides benefits for individuals who have limited amounts to invest or have not yet found the best investment options and wish to conduct further research. 

German laws also ensure legal protection for deposited funds in savings accounts, up to €100 per person per account. 

There are two main types of savings accounts available in Germany, which are well-known among banks

  • Instant Access Savings Account: Your savings account differs from your regular current account at the bank in that it allows you to earn some interest on your money. You can also freely transfer funds from your savings account to your current account at any time.
  • Fixed Deposit Account: The fixed deposit account requires a minimum investment and a specified period. This account offers a higher interest rate, and this rate is fixed for the duration of the specified period.

Investing in retirement plans is one of the best investment methods in Germany. 

If you work in Germany, it is known that everyone is obligated to contribute to the public retirement system. 

These contributions are automatically deducted from your monthly paycheck, and you are entitled to receive a legal retirement pension that starts at the retirement age and amounts to around 70% of your current net income. 

However, the issue lies in the fact that the retirement age was 65 and gradually increased to 67 due to the rising average life expectancy in Germany. In other words, you may consider investing in voluntary private retirement plans if you intend to stay in Germany for a long period. 

These plans can complement your public retirement system and help secure a stable life after retirement.

Investing in the stock market is considered one of the most effective and best investment methods in Germany.

There are three main methods of investing in the stock market in Germany, as follows:

1. Direct investment in individual stocks:

 This traditional method requires research and finding good companies to invest in by purchasing their stocks. The only drawback of this type of investment is the high risk associated with investing in a single company.

 If you want to diversify your portfolio and reduce risks, you will need to invest in several companies in different industries.

2. Investment in mutual funds: 

In this method, investors' money is pooled together and used to purchase stocks. This can help save transaction fees as these fees are shared among the investors.

3. Investment in ETFs (Exchange-Traded Funds):

 This involves investing in funds that are traded on the stock exchange. The funds are passively managed, meaning they track a specific stock market index. 

The index is a collection of stocks from different companies that help investors assess market performance.

Investing through social trading is also one of the best ways to invest in Germany. 

Social trading, also known as copy trading, is a service designed for individuals interested in stock trading but who do not want to invest the time and effort in analyzing the stock market. 

Through a dedicated trading platform like eToro, social trading allows you to subscribe to and copy all the trades of a signal provider. A signal provider is another trader on the same platform who is assumed to be more successful and experienced in trading. 

When you subscribe to a signal provider, your account will automatically follow and execute the same trades as the signal provider. In return, the signal provider earns a larger commission if they have more subscribers.

Investing with P2P lending is one of the best investment methods in Germany. 

P2P lending refers to "peer-to-peer lending." 

Typically, if you want to borrow money from a traditional bank, they will impose a very high interest rate on you. This is because traditional banks are costly, as they have to cover the expenses of branches, employees, and high overhead costs. 

However, with P2P lending, you can borrow money with much higher returns through an online platform. The intermediary costs are reduced, and it operates with lower overhead expenses. For this reason, it is much cheaper than traditional banks.

Investing in real estate is one of the best investment methods in Germany. 

This is due to the following reasons:

  • You can obtain a mortgage loan from a bank with a currently low-interest rate ranging from 1-2%.
  • You won't have to worry about rent increases or the need to move.
  • You will have full control over the design and style of your home.
  • If you sell your investment property after owning it for 10 years, you won't be required to pay a capital gains tax of 25%.
  • There are no restrictions on foreigners in Germany regarding purchasing properties (either for personal use or investment).
  • If you leave Germany, you can rent out or sell your real estate properties as soon as you leave the country.

Conditions for investing in Germany are as follows:

  • Your passport must not be expired.
  • The person must be of legal age, which is over 18 years old.
  • Additionally, if you are 45 years old or older, you must provide tangible proof of having retirement financial insurance.
  • You must not have a criminal record.
  • Although not a mandatory requirement, proficiency in the German language can be helpful for interaction and smooth dealings in the investment environment.

In conclusion, we have discussed the best investment methods in Germany, along with the essential conditions for investing in the country. Therefore, if you are looking for an opportunity to achieve long-term financial returns, investing in Germany may be a good option for long-term financial success.


Font Size
lines height