Festgeldkonto

Overview

The Festgeldkonto (fixed-term deposit account) from SWK Bank is a classic term deposit with a fixed term of 12 months. It suits savers who want to lock in a larger amount for one year without needing access to the money during the term, and who want to know from day one exactly how much they will receive when the term ends. SWK Bank is a German direct bank based in Krefeld that, alongside term deposits, also offers loans and current accounts.

Interest rate

For a 12-month term, SWK Bank pays 2.90% p.a. This rate applies to investment amounts between €10,000 and €250,000; the bank itself advertises this with the note "top rate applies up to €250,000". The interest rate is guaranteed for the entire term and is fixed at the outset — it is not a variable rate that could still change during the term.

Savers who open the account directly on SWK Bank's website will find a wider range of terms: 1 month (0.60% p.a.), 3 months (1.75%), 6 months (2.45%), 12 months (2.90%, the offer discussed here), 24 months (3.10%, the highest rate in the overview), and terms of up to 120 months at rates between 2.85% and 3.10%. Savers willing to commit for longer could therefore potentially earn a higher rate than the 2.90% advertised here — though that is not the subject of the 12-month offer reviewed here.

Conditions

The minimum investment is €10,000, and the maximum is €250,000 per account. Opening the account requires a reference account whose holder must be identical to the applicant — an existing current account, in other words, through which the deposit and, at the end of the term, the repayment plus interest are processed. According to the information available, this reference account does not necessarily need to be held at a different bank. The deposit is protected under the statutory deposit guarantee scheme of the Entschädigungseinrichtung deutscher Banken GmbH up to €100,000 per customer and bank. Savers who use the full range of up to €250,000 should note that any amount above €100,000 is not covered by the statutory deposit guarantee.

Who is this term deposit for

This offer suits savers who want to invest a medium to larger amount between €10,000 and €100,000 for exactly one year at low risk with a guaranteed return, without needing access to the money during the term. For smaller amounts below €10,000, this particular offer is not accessible; savers would need to look at a different product from the bank or another provider.

Taxation of interest income

In Germany, interest income from term deposits is generally subject to the flat-rate withholding tax (Abgeltungsteuer) of 25%, plus the solidarity surcharge and, where applicable, church tax. The saver's lump-sum allowance (Sparer-Pauschbetrag) currently stands at €1,000 for individuals and €2,000 for jointly assessed married couples and civil partners — capital income up to this amount remains tax-free per year, provided an exemption order (Freistellungsauftrag) is filed with the bank in good time. Savers who do not file an exemption order initially pay withholding tax on the full interest income and can reclaim any overpaid tax via their income tax return.

Verdict

SWK Bank's term deposit offers a solid, guaranteed interest rate of 2.90% p.a. for 12 months on investment amounts between €10,000 and €250,000. The bank places value on transparent conditions and, according to its own website, offers even higher rates for longer commitments. Important for the investment decision: amounts above €100,000 are only partially covered by the statutory deposit guarantee.