Form of investment - one-off investment 

This works like an investment in securities. Here, a fixed investment amount is converted into fund units by means of a one-time investment.

The one-time investment in funds is one of the most popular forms of one-time investment in securities. Compared to single investments in shares, for example, this form of investment offers numerous opportunities for a diversified portfolio due to the breadth of investments and the different investment focuses.  Which funds the investor invests in depends only on the investment objective, the time horizon and the type of investor.

With a one-time investment, investors do not have to commit to a term, and they remain absolutely unattached. The investor decides for himself when he wants to turn his fund units back into cash. He can, of course, increase the initial one-time investment at any time or exchange it for other funds.

If the investor needs the invested capital unexpectedly and at short notice, he can usually get his capital back easily and without additional costs with a one-time investment.

Costs more bearable nowadays

A disadvantage of short- to medium-term one-off investments is the issue surcharge that has to be paid, which can be between 4% and 6% of the acquisition costs. Ten years ago, this often led investors to choose another type of investment in case of doubt.

For some years now, however, various fund brokers on the internet have been providing a remedy. They usually grant investors a 100% discount on the front-end load for savings plans and one-time investments, although a minimum investment amount usually has to be observed. Depending on the custodian bank, this often varies between 500 euros and 2,500 euros.

In contrast, the annual management or administration fee and the corresponding custody account fees, which were also common in earlier times, have not changed.

Consider service advantages

Some providers offer their customers the special service of holding funds in a custody account as a one-time investment or savings plan as well as additional securities. This saves money on additional custody accounts and the work involved in consolidating custody account statements for the annual tax return.

Form of investment - savings plan 

Most savings plans are offered by banks. With this form of investment, for example, savings plans with annually increasing guaranteed or variable interest rates are offered. Depending on the interest rate development, this can be an advantage or a disadvantage.

Availability is also an important point with a savings plan. Depending on the contract, you are bound to the agreed term of the contract. However, there is also the possibility to terminate the savings deposit prematurely with a 3-month notice period.

Usually quite long terms

The term for a savings certificate is usually between 2 and 6 years, but the investment period can also be up to 10 years. With such a savings certificate, an available amount of money is invested for one or more years at a fixed interest rate.

This has the advantage that the purchase and safekeeping of a savings certificate are free of charge, and it is not subject to any price fluctuations. The disadvantage is that you cannot dispose of the invested savings amount for the fixed period.

Compounding and discounting

A distinction should be made between compounding and discounting savings bonds. Accumulated savings bonds are characterised by the fact that the interest amounts are credited annually to the investment amount and are also discounted. In the case of discounted savings bonds, the interest is calculated in advance and subtracted from the investment amount. Therefore, a sum of money lower by this interest amount must be paid into the savings certificate.

Roughly speaking, a distinction can be made between distributing investments used in how to verify exness account, accumulating investments and discounted investments, which makes it easy to compare the most important savings bonds on offer. The most common type is the distributing investment, where a fixed amount of money is invested and the interest is paid out annually. With the accumulating investment, the credited interest is paid out with the savings amount at the end of the investment period.