I will be travelling to Germany next week (I have no account there yet) and have 2 questions:
1. How does one go about buying say €10000 of Bunds? A bank, Post Office?
2. I have read comments in some Posts that Deutsch Bank could be risky. If so why and which German Banks are seen as not risky?
Deutsche bank are leveraged like any other bank.
I dont know what level of savings you have but notwithstanding the level of deposit guarantee, the German government government wont let DB fail.
If it's a position of all bets are off then it's run for the hills with tinned food time.
The ECB are going to step in and buy up all the debt/print the money to do so, so I wouldn't be bothered travelling anywhere.
3. They are "guaranteed" by german gov, bonds have no guarantee- some guarantee is better than none at all !
I'm glad I'm getting a debate going- I have been turning this over in my own mind and am on the side of german deposits v bunds. I'm well aware that DB is not the best of german bank, but they are the only bank (for good reasons of course) who are especially receptive to non-residents. Just like here, all the banks are interlinked. They are I believe the biggest retail bank in germany, that counts for something..
Thanks for the replies & comments but nobody has answered the question I posed:
1. How does one go about buying say €10000 of Bunds? A bank, Post Office?
MoM
Can you expand on what you mean by diversification with examples for those of us without experience in money management.
Also, for someone with less than 50k, should they be worried about guarantees and diversification away from a German account?
1 year bunds are now returning below zero yield. Just an observation!
I think this will only be a big issue if inflation increases. Most people arent looking to them for their ROI.
Negative yields basically mean it is costing you money to hold German paper. If people are willing to invest in something offering below zero yields or yields of about 1% when inflation is running at 3% because they are looking for safety if the euro collapses, then bunds are not the answer.
Negative yields basically mean it is costing you money to hold German paper.
If people are willing to invest in something offering below zero yields or yields of about 1% when inflation is running at 3% because they are looking for safety if the euro collapses, then bunds are not the answer.
Sunny is absolutely right. What also has to be taken into account is that income on Bunds would be taxable as income at the marginal rate, while interest on cash would be taxed under DIRT.
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