This is what makes FestPlus the superior fixed-term deposit

Since the beginning of the interest rate turnaround in July 2022, more than 180 billion euros have flowed into fixed-term deposits in Germany. For three-year fixed-term deposits, investors can currently look forward to an average of 2.87% interest per year (as of 07/2026). In the current interest rate environment, this makes fixed-term deposit accounts a sensible addition to overnight money (demand deposits), as it allows investors to secure an attractive interest rate for the long term.

However, fixed-term deposits also have their downsides, as it is often very difficult or even impossible to access the funds during the term. At the same time, interest rates have continued to rise over recent months, meaning that investors who opted for a fixed-term deposit 12 months ago would receive significantly more attractive rates if they were to sign up today. Furthermore, as with overnight money, banks are not known for passing on the highest possible interest rates to custody accounts. 

We have therefore developed FestPlus, a sophisticated alternative to conventional fixed-term deposits that invests capital on a diversified basis in the bond market, thereby generally generating a superior yield performance. This is combined with enhanced flexibility, as the capital remains accessible at any time. 

How does FestPlus work?

FestPlus is an alternative built via the bond market to the traditional fixed-term deposits offered by banks. FestPlus has a fixed maturity until September 2027 and will fully return the invested capital at that point. In addition, investors can benefit from interest distributions during the term, which are reinvested directly into FestPlus to optimally exploit the compound interest effect. Currently, this can generate an annual yield of 2.87% (as of 07/2026), which, net of all costs, is more than 0.4% above the average fixed-term deposit offer in Germany, while allowing for more flexible withdrawals.

The advantage over CashPlus, the overnight money 2.0: Thanks to the fixed maturity repayment, it offers planning security and allows you to lock in the current interest rate level until September 2027, regardless of future interest rate movements.

The objective with FestPlus is therefore for the capital to remain invested until maturity to fully capture the yield performance. However, should you require the funds earlier or identify more attractive investment opportunities elsewhere, FestPlus can be liquidated in whole or in part at any time without onerous conditions. This significantly enhances your financial flexibility. 

How does FestPlus differ from traditional fixed-term deposits?

With traditional fixed-term deposits, funds are deposited with a bank, which in turn pays a corresponding interest rate. FestPlus, on the other hand, unleashes the performance of the bond market, thereby scoring with a higher average yield and greater flexibility.

What are the risks and opportunities?

When you allocate capital to FestPlus, you can expect the current yield to maturity by holding it until the end of the term. A default of a bond is historically considered highly improbable. Furthermore, to mitigate risk, no single bond in FestPlus constitutes more than 3% of the total investment value, introducing an institutional-grade security mechanism. By comparison, if funds are placed in a traditional bank fixed-term deposit and that bank encounters solvency issues, the statutory deposit protection scheme only covers up to €100,000. 

Selling the investment prior to maturity is possible at any time, enhancing liquidity management. You can also access these funds at any time using the UnitPlus bank card. However, a changing interest rate environment can introduce interest rate risk, which, in unfavorable circumstances, may result in a temporary loss of capital during the term. This risk is neutralized if you hold FestPlus to maturity in September 2027 and no bond defaults during the term (default risk). We highlight these factors in our app and provide the appropriate decision-making support tool.

Summary

FestPlus is particularly suitable if you can commit capital until September 2027, seek an attractive yield, and value additional liquidity flexibility. At the same time, FestPlus can be seamlessly combined with other investment strategies, such as CashPlus, directly within the app. 

Risk Disclosure

This article does not constitute investment advice, nor does it recommend the purchase or sale of any financial instruments. Capital market investments carry inherent risks, which can include the total loss of invested capital. Historical performance is not a reliable indicator of future asset valuation or returns.