What is a fixed-term deposit (Festgeld)? Definition and how it works
A fixed-term deposit (Festgeld in German, also called a term deposit) is one of the safest forms of investment in Germany and Europe. With a fixed-term deposit account you place a set amount of money for a pre-agreed term at a guaranteed interest rate. During that time you cannot access the money – in return you receive a higher rate than with flexible instant-access savings (Tagesgeld).
The basic principle is simple: the longer you tie up your money, the higher the interest you usually receive. Typical terms range from 6 months to 10 years, with terms of 12 to 36 months chosen most often. The minimum deposit is roughly between €1,000 (e.g. J&T Direktbank) and €10,000 (e.g. GEFA Bank), depending on the bank. For terms of more than a year, many banks pay interest annually.
Fixed-term deposits at a glance
How a fixed-term deposit works
- Open an account: you choose a provider and open a fixed-term deposit account online. Identity is verified by video ID or PostIdent (identity check at a post office).
- Choose amount & term: you decide how much money you want to invest and for how long.
- Transfer the money: after the account is opened, you transfer the amount from your reference account.
- Receive interest: at the end of the term you get your capital back plus the interest earned.
Fixed-term deposit rates 2026 – current rates at a glance
Since the ECB's change of course on interest rates in 2022, fixed-term deposits have paid noticeable interest again. The chart shows the highest rate in our comparison for each term (investment amount €20,000) – the figures are updated continuously from the partner feed.
Current fixed-term deposit rates by term (best rate per term)
Source: kosten.org fixed-term deposit comparison (live data from the partner feed), investment amount €20,000. Highest rate per term, in some cases with a minimum deposit.
Rates and terms – what influences the fixed-term deposit rate?
The level of fixed-term deposit rates depends on several factors. The most important is the key interest rate of the European Central Bank (ECB). When the key rate rises, fixed-term deposit rates usually rise too – and vice versa. For longer terms, interest rate expectations in the capital market also matter: if the market expects falling rates, long terms often pay hardly any more than short ones.
Other factors that influence the rate:
- Term: longer commitment = higher rate (usually)
- Investment amount: some banks offer tiered rates
- Provider: direct banks and foreign banks often offer better terms
- Market dynamics: new-customer promotions and competitive pressure
Watch out: inverted yield curve
The longest term does not automatically bring the highest rate. When short terms pay more than long ones, this is called an inverted yield curve. A look at the chart above shows how the rate currently rises or falls with the term – always check several terms.
Deposit protection – how safe is your fixed-term deposit?
Deposit protection (Einlagensicherung) is one of the most important aspects of a fixed-term deposit. Throughout the European Union, deposits of up to €100,000 per bank and customer are protected by statutory deposit protection. This rule is based on EU Directive 2014/49/EU.
That means: even if a bank becomes insolvent, your money is fully protected up to the limit. Compensation is paid within 7 working days of the deposit guarantee event being established.
EU deposit protection
The same statutory minimum protection of €100,000 applies in all EU countries. J&T Direktbank, for example, is the German branch of the Czech J&T BANKA – the Czech guarantee scheme is responsible. How well funded a national scheme is, and how strongly the state can step in in an emergency, is however not the same everywhere.
Additional protection schemes in Germany
Many German banks are also members of voluntary deposit protection funds. The Deposit Protection Fund of the Association of German Banks (BdB) protects deposits in some cases up to the millions. Savings banks (Sparkassen) and cooperative banks have their own institutional protection schemes.
Selected fixed-term deposit providers in profile
You will find the current rates of all providers in the comparison above – they change constantly. Here are the key facts on some well-known banks (as of October 2026, according to the providers' websites):
J&T Direktbank
J&T Direktbank is the German branch of the Czech J&T BANKA, a.s. (branch office in Frankfurt am Main). It offers fixed-term deposits with terms from 6 to 120 months.
- Minimum deposit: €1,000
- Maximum deposit: €250,000 per fixed-term contract
- Interest payment: annually and at the end of the term
- Deposit protection: 🇨🇿 Czech statutory deposit protection (€100,000)
GEFA Bank
GEFA BANK from Wuppertal belongs to the French Groupe BPCE and is best known as a lender to medium-sized businesses. For savers it offers FestGeld and ZinsWachstum (with a compound-interest effect) with German deposit protection.
- Products: FestGeld and ZinsWachstum (with compound interest)
- Minimum deposit for FestGeld: €10,000, maximum €10,000,000
- Cannot be terminated during the term
- Deposit protection: 🇩🇪 German statutory deposit protection
CreditPlus Bank
CreditPlus Bank is a German bank based in Stuttgart and part of the Crédit Agricole Group. Besides loans, it offers fixed-term deposits with German deposit protection.
Hanseatic Bank
Hanseatic Bank, based in Hamburg, offers a classic fixed-term product with its SparBrief. As a German bank it is covered by German statutory deposit protection.
Pros and cons of fixed-term deposits
Pros
- Guaranteed, fixed interest rate
- 100% deposit protection up to €100,000
- No price risk as with shares/funds
- Predictable return
- Higher interest than instant-access savings
- No fees with reputable providers
Cons
- Money is tied up during the term
- Early termination usually not possible
- Inflation risk with long terms
- Return below the historical equity average
- Interest rate risk (rising rates = missed return)
Practical tips for your fixed-term deposit
6 tips for your fixed-term deposit
- Build a deposit ladder: split your capital across different terms (e.g. 12, 24, 36 months). That way some capital is freed up regularly and you can react to changes in interest rates.
- Mind the €100,000 limit: don't place more than €100,000 with one bank (fixed-term and instant-access savings at the same bank count together). Spread larger amounts across several institutions.
- Set up a tax exemption order: use the saver's allowance (Sparerpauschbetrag) of €1,000 (€2,000 for couples assessed jointly). With foreign banks that do not withhold German tax, declare the interest in Annex KAP of your tax return.
- Watch how rates develop: if you expect rates to rise, choose shorter terms.
- Avoid automatic rollover: some banks automatically renew at the terms then in force. Check in good time before the end of the term whether you want to renew.
- Prefer direct banks: branch banks often offer lower rates than direct banks – a comparison is worthwhile.
- Plan the account opening: park money you don't need in the meantime in instant-access savings until the fixed-term deposit is active.
Fixed-term deposit vs. instant-access savings – which is better?
The choice between a fixed-term deposit and instant-access savings depends on your personal needs. Here is a direct comparison:
| Criterion | Fixed-term deposit | Instant-access savings |
|---|---|---|
| Interest rate | up to 3.70% p.a. | up to 4.10% p.a. |
| Availability | after the end of the term | at any time |
| Rate certainty | guaranteed | variable |
| Deposit protection | €100,000 | €100,000 |
| Suitable for | planned expenses | emergency fund |
Rule of thumb: many savers combine both: a reserve of three to six months' expenses in an instant-access account, money with a fixed date of use in a fixed-term deposit. This is not investment advice.
