Financial Crisis: Is My Money Safe?
Money under the mattress?
I have invested money for retirement in various investments. Now I'm in a panic because of the banking crisis. I would like to get my money from the bank and put it under the mattress. At least it would be safe, even if there is no interest. Or is my fear exaggerated, what do you mean?
Helma Sick: Believe me - panic is the worst of all counselors. Because even with panic you can destroy money. It certainly does not belong under the pillow or in the linen closet. That would be a great find for every thief. And a mass panic in which all investors dissolve their assets and reclaim their money could also bring down the most solid financial institutions. Investors are safer in Germany than anywhere else in the world. So, if you have a long-term goal like retirement and your money is invested in different good assets, please stay with it. Now strong nerves and long breath are needed. And you can be sure: even the worst crisis will be over sometime.
Dissolve day money account?
I have two properties that are rented. And I have a bigger amount on a call money account. Now, the interest rate for my loan expires soon, so I could with the money from the savings account to pay off the loans. I'm considering that because I'm afraid of bank failure. But is that wise too?
Helma Sick: Presumably, you pay more interest on your mortgage than you receive on the daily or fixed-term deposit. In this respect, a repayment is rewarding. But how it looks to you for tax purposes, your tax accountant must assess. Because if you no longer have debts, you have to pay tax on the rental income. How this affects you for tax depends u. a. of your income and your tax rate. So you would need to ask your accountant. The fear of losing money on the call money account is unjustified. Savings deposits are protected in large amounts if your bank is a member of the voluntary deposit guarantee fund or if it is a savings bank or a cooperative bank.
Is my Riester pension in danger?
I'm 42 and have two years ago a Riester contract with fund savings plan completed. Now the stocks crash - was the investment perhaps a mistake?
Helma Sick: With a Riester contract, not much can happen to you, because with every Riester contract, whether insurance, bank savings plan or fund savings plan, the provider must definitely guarantee the capital invested. That's what you get in any case. And because of the stock funds in your savings plan, you do not have to worry much. You still have 25 years to retire. Over such a long investment period, all equity funds have so far yielded a very good average yield. So stay calm and sit out the crisis. In the end, the result will be correct.
Are funds and savings still safe now?
I assume that Federal Treasury letters are safe. But what about funds and other savings?
Helma Sick: The voluntary security fund of the banks protects passbooks, overnight money, fixed deposits, fixed interest savings and the savings bonds of the respective bank. Federal Treasury letters are government papers. In any case, the state is liable here. Also funds are very well secured. For funds are legally special assets. Even if the fund company went bankrupt, the money of the fund investors would be safe from the creditors' access, because the fund assets are not included in the bankruptcy estate.
Does the bank pay back my savings in the event of a bankruptcy?
The messages confuse me: Sometimes it says that 20 000 € are secured by my savings, then again is of millions of dollars the speech. What's wrong?
Helma Sick: The compensation scheme of German banks is obligatory for all German banks. All EU countries have similar institutions, but the amounts secured vary by country. In Germany, customers receive 90 percent of their deposits in the event of a bank failure, but no more than EUR 20,000. Most financial institutions in Germany have voluntary security. Cooperative banks and savings banks protect their customers through their own security funds. Most private banks are in the "Deposit Guarantee Fund". Normally, even smaller banks insure millions of customers per customer. In addition, Chancellor Merkel and Finance Minister Steinbrück have publicly stated that the state vouches for all savings.
Are private pensions still good investments now?
I wanted to be on the safe side for my pensions and paid large sums into private pension insurance. Do I have to worry about these plants now?
Helma Sick:No, you do not need that.Although an insurance company can go broke. But the capital of the insured is bound by law in a special fund and may not be paid to the creditors in the event of bankruptcy. If the insurance company can not be saved, Protektor - that is the insurance industry's insurance fund - will take over the insurance contracts. In such a case protector would also continue your contracts.
Contribution pay now?
I am 47 years old and have been taking care of my retirement account with the Deutsche Rentenversicherung for a long time. In particular I try to avoid gaps, because I am only sporadically occupied because of the children (8, 12 and 15 years old). But now I forgot to pay voluntary contributions for 2007. Is this still possible until the end of this year?
Helma Sick:No, voluntary pension contributions must be paid by 31 March of the following year at the latest. For 2007, until March 31, 2008. Unfortunately, you have missed this deadline. But until the tenth birthday of your youngest child, you will be credited with a consideration for parenting. This period also maintains the right to a pension for reduced earning capacity. However, after the tenth birthday of your youngest, the voluntary contributions, which in your case are to guarantee entitlement to a pension for reduced earning capacity, must be received no later than March of the following year. Tip: Have the contributions deducted by the pension insurance institution. Then it can not happen to you that you miss the appointment.
