I have a chunk of my saving with deutsche bank. I don't have bunds.They are the biggest bank in germany, and yes they have bad debts ++. However, in this bunds v german deposits issue, my own current view is that a german deposit is better option. Why?
1. You get 2% interest
2. Its value does not fluctuate like bonds
3. They are "guaranteed" by german gov, bonds have no guarantee- some guarantee is better than none at all !
4. If there is a financial meltdown, I would have thought that german gov would protect deposit holders over bund holders- this is main argument for german deposit over bunds
5. The one argument for bunds is that in a euro "divorce", german gov could say non-resident accounts are now not guaranateed or they revert to their country of origin eg punt nua etc. This is possible, but what about Helga & Fritz who lives in Ireland, have irish PPSNs, but have their life savings in home country? Also severe reputational damage to germany for doing this? What above people then whose country of residence is not in the eurozone but have non-resident accounts
I don't have all the answers, feel free to critically evaluate these arguments!! Its point 4 v point 5 really...