Risk of investment products
| Product | Risk of capital loss | Convertibility into cash | Expenses | Return (What influences it? What does it consist of?) |
| Savings accounts | The bank is responsible for the capital and interest. Deposit guarantee EUR 100,000 / customer / bank (* (includes capital and interest). |
Paid on demand, monthly withdrawals usually restricted. | Generally no expenses. | Return agreed on in advance. |
|
Fixed-term deposits |
The bank is responsible for the capital and interest. Deposit guarantee EUR 100,000 / customer / bank (includes capital and interest (*. The equity- or index-linked return may fall outside the scope of the deposit guarantee. | Can usually be transferred or used as collateral without limitations. Termination of contract usually possible. |
Termination of contract usually subject to termination expenses. | a) Agreed on in advance. b) Return depends on the return of a specific underlying asset, subject to market developments. The return may be zero. |
| Listed shares | Significant | In principle, easy to convert into cash; market conditions affect the price and tradability. | Trading expenses (broker-dependent) and custody expenses. |
Consists of potential capital gain and dividends. Price performance and dividend income depend on market conditions. |
| Investment funds a) short-term fixed-income fund b) long-term fixed-income fund c) balanced fund d) equity fund |
Varies by fund type. | Easy to convert into cash, redemption procedure is stated in fund rules. | Subscription fee, redemption fee and management fee in accordance with fund rules. Fees vary according to fund type. | Return on fund units depends on the return of the investments of the fund |
| Bonds a) conventional bonds b) index-linked bonds |
Depends on the issuer: a) typically very low risk in bonds issued by governments and public sector entities, b) in corporate bonds, the risk depends on the financial position of the company. |
Possible during the loan term. The counterparty is typically the issuer, who sets the price level. Secondary market may be inactive. |
Trading costs are included in the lower resale value. Subscription fees, premium in connection with subscription and custody fees possible. | When held to maturity, the return is as stated in the loan terms. If sold during the term of the loan, return depends, for example, on the interest rate level, which affects the value of bonds. Return on index-linked bonds depends on the performance of the underlying index. |
| Derivatives a) securities (warrants) b) derivatives contracts (options, forwards, futures) |
Significant. The loss on derivatives contracts may in some cases exceed the capital invested. | In principle, easy to convert into cash; market conditions affect the price and tradability. | Trading expenses and custody expenses. Derivatives contracts may require collateral. | The return prospects may be high, but in such a case, the risks are high, too. The return depends on market developments and selection of risk level. |
| Investment-linked insurance | Risk is present, depending on the underlying investment. Compare with investment funds. | Usually minimum savings period of 2 years. Earlier exit possible, subject to additional expenses. Pension insurance cannot be exited during the contract period. |
Fee structure typically complex, insurance expenses, investment expenses, exit expenses. | Depends on underlying investment. Compare with investment funds. |
*) As regards cooperative banks belonging to the amalgamation of cooperative banks, the protection is group-specific