What are the disadvantages of personal savings

How to find the right type of investment

Conservative forms of investment

A conservative financial or asset investment is understood to be a form of investment (watch the video on forms of investment) that has a low risk of default or loss. This form of investment, for example, offers the security that the assets saved in the long term will not suddenly decrease, but that they will at least be preserved. The accumulation of assets should therefore be as risk-free and sustainable as possible.

Home savings

Bausparen is actually not a financial investment, as the Bauspar contract usually has to be used for a specific purpose. The money saved and attracting interest is then used for building finance or renovations.

However, if investors choose not to take out the loan, some banks will pay a premium. However, investors must adhere to strict rules in order to receive the premium.

Fees that are due when concluding a home loan and savings contract must also be taken into account.

Loss until the due date

The term of the home loan and savings contract is usually several years. Until the contract expires, investors can only use the money at a loss, which limits liquidity.

Savings plan

Savings plans can be implemented in different ways. The basic idea behind this is to invest a small fortune with regular monthly payments.

Investors can traditionally rely on the savings book to which they transfer their money. However, this form of investment only shows a very small return, even if the savings book is one of the classics and one of the most popular forms of investment in Germany.

Today, savings plans are mostly linked to investments in stocks or funds, with part of the monthly savings amount earning fixed interest and the other part being invested in securities, stocks or funds. The advantage here is a minimization of the risk with higher yields at the same time.

Fixed deposit

With fixed-term deposits, consumers invest a fixed sum over a longer period of time at a contractually agreed fixed rate of interest. The fixed deposit is paid in as a one-off amount. Therefore, this form of investment is usually suitable when consumers have a large amount of capital freely available.

This form of investment is conservative because it does not promise flexibility and offers a fixed rate of interest. Fixed-term deposits are considered a safe investment if they are used by banks that are part of the deposit protection scheme.

Overnight money

The overnight money is usually used as a supplement to a fixed-term deposit account or a share deposit. Investors thus have the option of “parking” capital that has become free at interest until they invest it again.

The interest rate is usually low, but investors benefit from daily availability. In contrast to the current account, there is interest here at all.


Real estate can be viewed as a conservative form of investment as it promises a stable investment. The prerequisites for this are the location and condition of the property as well as the generally positive market development. Similar to precious metals, real estate is considered to be relatively crisis-resistant, at least in this country.

Gold / precious metals

Gold and other precious metals are considered a safe and stable form of investment, especially in times of crisis. It is advisable to use gold primarily as a long-term investment.

Advantages and disadvantages of conservative investments

  • Investments are usually possible without prior knowledge
  • With a higher return mostly long-term commitment
  • Investment forms suitable for all investors
  • High availability at all banks
  • Slow asset growth

Investment forms with strong returns

High-yield investment forms are those investments that offer high interest rates, high distributions or dividends. Usually, high-yield forms of investment are associated with a higher risk for investors.


Shares are considered a risky form of investment, as the return always depends on market fluctuations and the respective company development. However, those who invest carefully in stocks can achieve high returns. However, there is no guarantee of profits.


Bonds are still considered to be very safe among the high-yield forms of investment, as they guarantee a certain interest rate over several years. In the case of government bonds such as corporate bonds, however, investors should pay close attention to the creditworthiness.


Funds and mutual funds are securities that are traded on the stock exchange. Funds are managed by fund companies that distribute the investors' capital across several investment areas. Compared to investing in individual stocks, diversification in fund investments offers greater security. However, the amount of the return depends on the composition of the funds and thus on the work of the respective fund manager. In order to determine the return on funds, it is important for investors to consider management fees.


This type of investment (ETF, English for exchange-traded fund) involves funds that are traded on the stock exchange. As a rule, investors rely on passive fund management. The funds are compiled using benchmarks. The administration costs are usually lower due to the passive administration.

Material assets

Real estate, works of art, vintage cars, jewelry or high-quality designer clothing can be used by investors for investments. It often remains uncertain whether this will generate a high return, as there are no fixed rules or benchmarks for increasing value. When it comes to real assets, risk-averse investors should carefully consider where to invest.

Derivatives and structured financial products

Derivatives such as certificates or options can bring investors very high profits. However, equally high losses are possible. A prerequisite for long-term success with this type of investment is profound knowledge of the subject and the market.

Basically, there is no such thing as the best form of investment. Instead, investors should opt for a well thought-out mix of different types of investment. Which method you choose always depends on your own willingness to take risks and the capital available.

Anyone who already owns 500,000 euros is more likely to get over it if they lose 30,000 euros while speculating on the stock market. On the other hand, those who have saved many years in order to build up a fortune of 100,000 euros will act more cautiously and prefer security when investing instead.

Decision-making aid magic triangle

The so-called "magic triangle of investments" describes the three most important aspects of investments: returns, security and liquidity / availability. The best form of investment should bring a high return with maximum security and permanent availability.

In reality, however, investors always have to compromise on one of the three cornerstones and ultimately weigh which aspect is more important to them. Because the more one part of the magic triangle is focused, the weaker another becomes. There is no way that all three corners are weighted exactly equally.

Example: If you choose a very profitable investment, either security or availability suffers. If security is also to play a major role, you will have to forego liquidity. For example, it is possible that you can achieve a high return with funds compared to other forms of investment and at the same time benefit from a safe investment. On the other hand, you have to expect longer terms within which your capital is tied up and therefore not available.

Check the seriousness of analgesic products

You can also use the magic triangle to check the seriousness of investment products. For example, if providers promise an above-average return with a very high level of security, you should take a closer look. In this case it could be a dubious offer.

The three aspects of the magical investment triangle


The return on an asset or financial investment is summarized in its income. This can be dividends from stocks, interest from securities or increases in the value of foreign currencies. In addition, further distributions can also be counted towards the return. On the other hand, if an investment generates high returns, investors must expect high fluctuations in value or losses. In addition, possible fees must be taken into account when investing money, which can reduce the return.


Investors can increase the security of their investments by diversifying as widely as possible. They invest their money in various ways, for example in securities, funds and fixed-term deposits. Various mechanisms such as the European deposit insurance also provide security. Here, banks undertake to protect customers' deposits up to a certain amount, usually 100,000 euros, in the event of their insolvency. Some banks increase this safety net through their own mechanisms, such as the savings bank group or the cooperative banks. Consumers can also achieve security by investing in stable values ​​for investment. For example, buying gold can offer a high level of security. The same applies to government bonds from countries with high credit ratings.


Liquidity is also referred to as availability. The capital that is invested is usually tied up for a certain period of time. The shorter this phase, the more liquid the investment. Most of the time, the return is reduced to the same extent as the liquidity increases. For example, overnight money with daily availability usually brings the least interest income.