The Deutsche Bundesbank recently published an interesting graph: It shows how the structure of German financial assets has changed over the years.

The volume of all monetary possessions in German private households has just passed the 7 trillion euro mark - to an impressive 7.143 trillion euro.

That is a new record.

But Germans' money is invested very differently today than it was a few years ago.

Christian Siedenbiedel

Editor in business.

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Particularly noticeable: the share of cash and sight deposits has risen and risen.

In return, the “other deposits” have declined - this is mainly due to savings accounts in the broadest sense.

Apparently, the savers said goodbye to the savings account at their bank.

The current account becomes a money collecting point

In 1991 these savings accounts made up around 40 percent of all German financial assets.

Cash and sight deposits, including the money in the current account, made up 10 percent of the financial assets at that time.

Over the years, however, this has almost been reversed.

Today savings accounts only make up 10 percent of financial assets. Cash and sight deposits, on the other hand, account for around 30 percent. The share of savings accounts is only around a quarter of the previous value, while the share of checking accounts and cash has roughly tripled. There was a rise in the current account - and a far-reaching departure from the savings account.

One reason is obvious: there is hardly any interest on savings deposits. Since 1990 capital market rates have been falling with certain ups and downs, and bank rates have also continued to decline. Today almost 500 banks in Germany even accept negative interest rates from private customers from a certain limit. Correspondingly, the decline in the share of savings deposits in the financial assets of private households - which has also been observed since the 1990s, at times in favor of the overnight money account - has received an additional boost in recent years.

At the same time, funds have gained in importance.

At the end of the 1990s, what was then Dresdner Bank under Bernhard Walter advertised the exchange of savings accounts for investment funds - which the savings banks, which still regarded the savings accounts as a core product, did not find particularly funny at the time.

In those years, the share of investment funds in financial assets increased.

Since then, despite many setbacks in stock market crises, it has remained consistently impressive.

The boys discover the stocks

Around the year 2000, stocks already made up quite a fair share of Germans' financial assets.

That was the dot-com era, the Internet bubble, when many Germans euphorically invested in shares of young Internet companies and their prices reached dizzying heights.

At that time, shares made up well over 10 percent of the financial assets of Germans - the value has not yet been fully reached again.

Recently, however, there has been a greater interest in stocks and their share in financial assets is increasing.

According to the Bundesbank, price developments on the stock market in the first few months of the year were therefore one of the most important reasons why Germans' financial assets exceeded the 7 trillion euro mark.

Figures from the Deutsches Aktieninstitut support these statements. Accordingly, the number of shareholders in Germany rose by 2.7 million to 12.4 million in the Corona year 2020 alone. "This means that around every sixth German is invested in stocks," says Gerrit Fey from the Capital Markets Department at the Aktieninstitut. The interest of younger people in the share has increased particularly strongly, probably also through the so-called neobrokers. Almost 600,000 young adults under the age of 30 ventured onto the trading floor in 2020 - an increase of almost 70 percent compared to the previous year.

The Bundesbank also compared how the return on financial assets of German private households has developed as a result of changes in the investment structure. In spite of all the adversities, it achieved good values, especially for the first quarter of 2021 - the strong development of stocks provided a very decent real total return on German financial assets.

In the first quarter of 2020, the real total return on financial assets of private households in Germany was still minus 1.9 percent - in the first quarter of 2021 it was calculated to be 7.2 percent.

However, that was solely due to the strong share performance.

Savings and current accounts, which together made up 40 percent of financial assets, have almost exclusively had a negative real total return since mid-2016.

So the savers are evidently learning - but slowly.

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