11 money investing tips for Germany in 2021

Do you want to know how you can invest money so it will grow and multiply in the future?

It doesn’t matter how old you are, how much money you hope to get out of it, or how long you want to invest your money. With the decision to invest your money, you have already taken an important first step. Well done!

You’re probably asking yourself: Where do I start? What are the best tips for investing money?

Trying to get an overview of all the different investment options can be overwhelming. For example, according to a study by Deutsches Aktieninstitut (German stock institute), only ten percent of Germans between the ages of 14 and 39 are investing in stocks.

To help you begin, we have put together our favourite tips on how to invest money in Germany. Whether you are thinking you want to invest in funds or real estate, these tips will help to find the right strategy for you.

Our 11 tips will also help you understand how you can invest your money within the level of risk you are comfortable with. And who knows, maybe you’ll discover your passion for investing and become the next Warren Buffet.


Tip 1: Goodbye, savings account – invest money in Germany with a return

Our first tip to invest money in Germany is to say goodbye to your bank account – at least, as the place you store your savings!

This is because as soon as your bank account starts to accumulate more money than you need to pay your bills every month, you lose money through a combination of low interest, fees and inflation. Sounds crazy, right? But indeed, if you are leaving your money in a bank account it will lose its value in the long term.

The times where you could get 2 – 3% interest on your savings account are long gone. Nowadays, German banks offer their customers interest rates of around 0.01%. However, prices are rising quicker than that – so the money in your bank account loses value.

A great indicator of that is the so-called “Big Mac Index”. The index indicates how much the Big Mac in a certain country or monetary union costs in relation to its price in other countries. This allows us to get a pretty good idea about the overall price level increase in a certain country. For example: In April 2002, the price of a Big Mac in Germany was EUR 2.67 while in July 2020 the price had risen to EUR 4.21.

Reason being inflation, which is the loss of value of a currency. Inflation on a certain level is healthy and important for the economy of the eurozone – but unfortunately not for the value of the money in your savings account. If the inflation rises higher than the interest rates of your savings account, then your assets will increasingly lose their value.

Even if inflation is not sending your money to go up in smoke, the German banks will probably take that into their own hands soon. For increasingly more German banks it is becoming standard commercial practice to grant negative interest rates even on savings and money market accounts (deposit accounts). That means you are going to pay money to the bank for depositing your money, instead of the bank paying you.

Even though it seems like a safe investment option, it’s time to say goodbye to your savings account as a good investment. 

With the help of our tips, you can find some good alternatives for investing your money with good interest rates. 


Tip 2: Invest money regularly

This suggestion is a great add-on to our first tip. If, at the end of each month, you regularly have money saved in your bank account, why not invest it automatically? 

Decide on an amount that gets transferred at the beginning of the month, and set up a standing order where the money moves into an investment each payday. This way, you are not tempted to spend it. You can invest money easily, without needing to actively think about it each month.

A great opportunity to invest money regularly is the savings plan from Inyova. Through the savings plan, you automatically save money monthly. Starting from EUR 100 a month, you are making a long term, sustainable investment. The best part is that you don’t have to commit yourself to anything. You can suspend your deposits at any time, stop them completely or adjust the amount and of course you can access your money at any time.


Tip 3: Don’t put all your eggs in one basket  

We understand that the hardest thing, in the beginning, is to decide where to invest money. Tip number three will help you with this decision.

In our extensive guide to investing in Germany (read more here), we have put together an overview of the different investment forms, so you can easily navigate yourself through the German investment jungle. 

Regardless of which option seems right for you, we advise you to diversify your investment. In a nutshell, don’t put all your eggs in one basket! For example, if you choose to invest your money in the stock market, you should buy stocks from companies that operate in different countries and different industries. You could also add bonds to your portfolio.

The reason for diversifying your investment is that you’ll minimise the risk of losing money if a country, industry or type of investment does not perform well.

At Inyova, all investment strategies contain around 30 – 40 different stocks, spread across industries, geographies, currencies, and other factors. Every time you adjust your strategy, the Inyova Engine recalculates the portfolio to maintain this level of diversification.


Tip 4: Define your investment horizon

One of the most tried-and-true principles of investing money is  also the most simple: the longer you can tie your money to an investment, the better. 

It’s important not to treat investing as a way of “getting rich quick”.

To come up with the right investment horizon, you’ll need to understand that each investment depends on three crucial factors: liquidity, return, and security. 

While return and security play a major role in the choice of investment, liquidity must be taken into account when it comes to defining the time horizon.

It is important to answer this question honestly.  Every investment is affected by fluctuations in the price of the stock or financial instrument, which means that your rate of return varies daily. Remember, having to take out money during a dip in the stock market could lead to a loss.

A long investment horizon goes some way to compensate for these market fluctuations and reduces the risk of losing money. At Inyova, we generally recommend investing your money for a minimum time period of five years. This way, you can usually “ride out” any dips in the market and sell your investment once prices have bounced back. 


Tip 5: Be aware of hidden fees

Nothing is more annoying than finding out you signed a contract but missed the hidden fees in the fine print.

When investing in funds, people are often surprised by the real cost of their investments. It can turn out to be as much as four times more expensive than you expected.

A further hidden risk can occur when investing in ETFs, as the estimated return often doesn’t include all of the fees. As a consequence, the actual outcome can be lower than expected.


Tip 6: Don’t forget your principles

Nowadays, a lot of investors want to invest money with a clear conscience.

If you care about leading a sustainable lifestyle and taking social responsibility, then your investment should reflect these values, too.

When it comes to sustainable funds, you have to be wary: just because funds say that they are sustainable doesn’t mean that your money will only be invested in responsible companies.

A lot of times the composition of funds is not transparent, so it’s not always clear where exactly you are investing your money and they can sometimes involve certain “unsustainable” companies.


Tip 7: Be careful with investment trends

It is always tempting to follow a recent craze and invest your money in trending companies or cryptocurrencies. But keep in mind that these kinds of investments are very risky and unpredictable as there is a lack of historical experience with them.

At Inyova we believe in investing your hard-earned money into companies that have already proven themselves instead. If you have enough historical data, it is possible to forecast an approximate return and to calculate the risk for the investment. Furthermore, we want to give you the opportunity to invest with Inyova in the future of your children


Tip 8:  Choose the right investment option 

Real estate may look like an attractive investment choice. And this might be true for those who put their money into real estate a few years ago and are now enjoying a decent return.

However, the prices for real estate in Germany can be high, so if you’re looking into it as an investment option, you might end up putting all of your money into one basket, simply because it’s very cash-demanding. 

Another option is for you to diversify your investment instead and split it between countries, currencies and other types. 

Note: if you are dreaming of owning a house to live in and you have the money to buy, this can still be a prudent investment as you can save money on rent.


Tip 9: Benefit from the rate of return

The magic phrase here is compound interest. 

Every investment aims to earn a return after a determined investment period, for example, 5% per year.

At the end of each period, you have two choices: you can either take out the return from your investment or you can reinvest it, adding the return to your initial investment amount. 

By reinvesting your money, you’ll benefit from a bigger return after the next investment period and it will begin to grow significantly without you having to invest new money.

That means compound interest works by reinvesting the return from your initial investment into the same portfolio over and over again, growing both the investment amount and the return. 

You could look at it like a snowball that is rolling down a hill. It grows with every meter as it collects more snow. The longer you leave the ball rolling, the bigger it will become. If you want to know how your investment trajectory is going to look, you can work it out with this simple online compound interest calculator.


Tip 10: Be patient!

Have you done the first step and invested in your optimal portfolio?

Congratulations! Now you’ll have to be patient, as it could take some time until you see first results from your investment. Successful investors don’t see investing in the stock market as a 100-meter sprint but rather as a marathon that has to be run slowly but steadily. 

Therefore, you shouldn’t expect to make a lot of money on the stock market overnight. It is much more likely that daily fluctuations will make your money grow or shrink by little amounts whereas the expected return will come over a longer period of time. This is why serenity is one of the most important trades of a successful investor. 

In the beginning, you’ll find it tempting to check the stock prices every day, but that can be quite stressful. As the course of events can anyway not be altered, you should relax and invest passively.


Tip 11: Talk about your money

German people have a reputation for being unwilling to talk about money. We think that should change.

The first step is to get your personalised impact investing strategy – it’s free and non-binding. Using our easy online tool, you pick investment themes based on your personal values and interests.

You can always write us a message, our experts will be happy to answer your questions concerning how to invest money. 




Introducing a new kind of investing, where you back companies that match your values. It’s sustainable, socially responsible investing – without compromising returns.