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Bonds in Germany: Bundesanleihen, Funds and Money for 3 Years

In personal finance, bonds do two jobs: together with deposits, they hold money for near-term goals, and they give a portfolio a part you won't have to sell after stocks fall. At the end of September 2026, 10-year Bundesanleihen (German federal bonds) yield about 3.6% a year [1]. Their default risk is minimal. For someone with income in euros, two risks remain: prices fall when rates rise, and inflation.

What "safe" means for bonds​

For a bond, "safe" answers one question: will you get paid? Bundesanleihen carry minimal default risk: S&P, Moody's and Fitch rate them AAA with a stable outlook (2026) [2]. The price before maturity and the purchasing power of the payments depend on other risks:

RiskWhat happensBundesanleihe with income in euros (2026)
DefaultThe issuer doesn't pay the coupon or the face value, as Russia did on its GKO bonds in 1998Minimal: AAA rating [2]
Interest rate riskRates rise, and the bond's price before maturity fallsPresent: funds holding eurozone government bonds lost about 18% in 2022 [3]
InflationThe debt is repaid on time but buys lessPresent: inflation of 3.3% (Destatis, September 2026, flash estimate) [4]
Currency riskThe debt is in a currency that loses value against your expensesNone for euro bonds; present for US Treasuries (US government bonds)

An individual bond you hold to maturity pays back its face value on schedule, so price swings along the way don't turn into a loss. That is the difference between risk and volatility. This holds except in three cases: a bond fund has no maturity date; you may need the money before maturity, and then the bond is sold at the current price; the face value buys less at maturity if inflation is higher than the yield.

Where to keep money you'll need within 3 years​

For money set aside for near-term goals, such as a down payment on a home, a car or a degree, what matters is knowing in advance how much will be there on the date. Tagesgeld (instant-access savings account), Festgeld (fixed-term deposit) and short Bundesanleihen held to maturity meet that condition. A money market fund almost meets it: its price moves little, but it isn't fixed.

Geldchen's principle: money you'll need in the next 3 years stays out of stocks. The 3-year line is an editorial guideline; no law sets it. After a crash, stocks can take years to recover, and a goal with a date may force you to sell at a loss. Money without a date has no investment horizon.

OptionBefore tax, September 2026After tax and inflationIf you need the money earlier
Tagesgeld, market average1.74% [5]−2.0 ppAccess on any day
Tagesgeld, top of market without a teaser rateabout 2.5% [6]−1.5 ppAccess on any day
Festgeld for 1–3 years, top of marketup to 3.4% [6]−0.8 ppUsually no early withdrawal
Bundesanleihe with 2 years leftabout 3.2% [7]−0.9 ppSale on the exchange at the current price
Money market ETFabout 2.4% (€STR, the overnight interbank rate) minus costs [8]about −1.5 ppSale on any trading day; the price barely moves

Geldchen's calculation: 26.375% tax, Sparerpauschbetrag (annual tax-free allowance for investment income) used up, bond bought near face value, inflation 3.3%. The real yield of every option is below zero in September 2026, and nobody knows inflation 3 years ahead. For money with a 10–20 year horizon, this lag behind inflation compounds.

Deposits are covered by Einlagensicherung (statutory deposit insurance): €100,000 per person per bank [9]. A Bundesanleihe has no amount limit. A money market ETF is not a deposit: its assets are kept separate from the fund company's own assets. The article on ETFs has the details.

A regular bond ETF never matures. The fund replaces bonds that are close to maturity with new ones, so its duration (how sensitive the price is to interest rates) barely changes. Festgeld, an individual bond and an ETF with a fixed maturity date do have an end date. For a fund without one, a common rule of thumb is a duration no longer than the time until you spend the money. That is why the "3-year money stays out of stocks" principle covers long bonds too: a fund with a duration of 7–8 years depends on rates, as 2022 showed.

In the Boat phase (the first 24 months after moving), this is the main job of bonds and deposits: often there is no portfolio to stabilize yet. The emergency fund sits separately, in Tagesgeld. It needs fast access; the rate comes second. The savings checklist lets you check where your money for near-term goals sits.

Why hold bonds when stocks are down 30%​

Bonds and cash in accounts are the part of a portfolio you don't have to sell after stocks fall. They can cover unexpected expenses and, if your plan says so, pay for rebalancing.

A 70/30 portfolio loses 21% when stocks fall 30%, if the bond part stays flat. To get back to 70/30, you move €6,300 from bonds into stocks for every €100,000 the portfolio held before the fall. The bond share and the rebalancing rule are decided before the first crash, in the Island phase, along with the first Depot (brokerage account).

Long government bonds soften a stock crash when interest rates fall at the same time. That happened in 2008: yields on long eurozone government bonds dropped and their prices rose [10]. In 2022 the ECB raised rates to fight inflation, and long bonds fell together with stocks [3]. Tagesgeld and Festgeld kept their nominal value in both years.

What Bundesanleihen yield in 2026​

The yield on 10-year Bundesanleihen rose through September 2026, reaching 3.64% on 28 September, the highest since 2011 [1][21]. The ECB deposit rate has been 2.50% since 16 September 2026. From 17 June it was 2.25%, and 2.00% before that [11][12].

Coupon and yield are different numbers. Take the 2.90% Bundesanleihe 2026/2036 (ISIN DE000BU2Z064). It pays a 2.90% coupon on its face value, but on 10 September 2026 it traded below face value, so its yield to maturity is about 3.4% [20]. If you buy it at that price and hold it until February 2036, you earn about 3.4% a year before tax and inflation, whatever rates do in the meantime (leaving coupon reinvestment aside). After tax that is about 2.5%; after 3.3% inflation, about −0.8 percentage points. If rates rise by another percentage point, its price before maturity drops by about 8%. For a bond with 2 years left, the drop is 2% (Geldchen's calculation).

How to buy Bundesanleihen as a private investor in 2026​

Through a Depot, on the exchange, from €0.01 of face value [13]. New customers can't buy directly from the state. The Finanzagentur (Germany's federal debt management agency) stopped selling securities to private individuals at the end of 2012, and Bundesschatzbriefe (federal savings bonds for households) haven't been issued since 2013 [13].

  • Stückzinsen (accrued interest): you pay the seller the coupon for the days since the last payment. Your bank books them as negative income in the Verlustverrechnungstopf (loss offset account) [14].
  • The trading fee is often fixed or has a minimum. At €5 on a €500 purchase, that is 1% of the amount, about a third of a year's return at a 3.2% yield (Geldchen's calculation, illustrative fee).
  • Stiftung Warentest (February 2026) names Bundesanleihen as an alternative to Festgeld for amounts above €100,000, the deposit insurance limit [15].

How bonds and bond ETFs are taxed​

Coupons and gains are subject to Abgeltungsteuer (flat tax on capital income) and Solidaritätszuschlag (solidarity surcharge): 26.375% combined, without church tax. The Sparerpauschbetrag is €1,000 a year per person and €2,000 for married couples (2026) [16]. The general rules are in the article on capital gains tax.

Bonds and bond funds have three rules of their own:

  • Bonds below face value. The coupon is taxed every year; the gap between the purchase price and face value is taxed only in the year of redemption, because the law treats redemption as a sale [16]. With a low-coupon bond, most of the income is taxed later. If your Sparerpauschbetrag isn't used up in the year of redemption, part of that gap stays tax-free. Tagesgeld, Festgeld and a Bundesanleihe bought near face value are taxed the same way.
  • No Teilfreistellung (partial tax exemption). Equity funds get 30% of their income tax-free; bond funds and money market ETFs get 0% [17].
  • Vorabpauschale. For an accumulating bond ETF, your broker will calculate the Vorabpauschale (advance lump-sum tax) for 2026 in January 2027, using a Basiszins (base rate for the calculation) of 3.20%. The tax is deducted if the fund rose over the year and your Sparerpauschbetrag is used up [18].

When to talk to a professional about bonds​

  • Honorarberater (fee-only adviser): you have several goals with different dates and need a plan for splitting money between them.
  • Verbraucherzentrale (consumer advice centre): your bank offers a "safe" bond fund with an Ausgabeaufschlag (front-end load), or a structured product.
  • Steuerberater (tax adviser): bonds in a foreign currency or at a foreign broker, or an inherited portfolio.

FAQ​

This is not legal or financial advice.

Why did bond ETFs lose money in 2022?​

From July 2022 to September 2023, the ECB raised its deposit rate from −0.50% to 4.00% [12], and funds holding eurozone government bonds lost about 18% in 2022 [3]. New bonds started paying more; older bonds with low coupons fell in price. A fund never matures, so the coupons of new, higher-yielding bonds can win the loss back, as long as rates don't rise again. A common rule of thumb for this recovery is a period of roughly the fund's duration.

Festgeld or a short Bundesanleihe for 2–3 years: how do they compare?​

In September 2026 the rates are close: up to 3.4% for top Festgeld offers over 1–3 years [6] and about 3.2% for a Bundesanleihe with 2 years left [7]. There are three differences. A deposit is protected up to €100,000 per person per bank [9]; a bond has no limit. Festgeld usually can't be withdrawn before the term ends, while a bond can be sold on any trading day, at the current price. With a bond below face value, part of the tax moves to the year of redemption [16].

Does Einlagensicherung protect bonds and ETFs in a Depot?​

No, it covers deposits. Securities in a Depot remain your property if the broker goes bankrupt. If the broker can't return them, Anlegerentschädigung (investor compensation) covers 90% of the claim, up to €20,000 [19]. Nobody compensates you if the bond issuer itself defaults.

Sources​

  1. onvista / dpa-AFX — Deutsche Anleihen: Kurse steigen weiter (10-year Bundesanleihen at 3.57%, 30 September 2026); Rendite für zehnjährige Bundesanleihe steigt auf 15-Jahreshoch (23 July 2026), 2026. https://www.onvista.de/news/2026/09-30-deutsche-anleihen-kurse-steigen-weiter-0-10-26559216, https://www.onvista.de/news/2026/07-23-rendite-fuer-zehnjaehrige-bundesanleihe-steigt-auf-15-jahreshoch-0-20-26535338
  2. Deutsche Finanzagentur — Ratings: AAA with a stable outlook from S&P, Fitch and Moody's, 2026. https://www.deutsche-finanzagentur.de/en/federal-funding/government-as-issuer/ratings
  3. Stiftung Warentest — Rentenfonds mit Euro-Staatsanleihen: Nach dem Zinsschock (fund losses in 2022), data for 2022. https://www.test.de/sind-rentenfonds-und-anleihen-etf-sinnvoll-5238798-0/
  4. Statistisches Bundesamt (Destatis) — Inflationsrate im September 2026 voraussichtlich +3,3 %, 30 September 2026. https://www.destatis.de/DE/Presse/Pressemitteilungen/2026/09/PD26_348_611.html
  5. Biallo — EZB-Leitzins erhöht: Wie entwickeln sich die Sparzinsen? (Tagesgeld index at 1.74% on 10 September 2026), 2026. https://www.biallo.de/geldanlage/news/ezb-leitzinserhoehung-september-2026/
  6. Stiftung Warentest — Tagesgeld und Festgeld: Festgeldzinsen steigen spürbar (top-of-market Tagesgeld without a teaser rate about 2.5%, Festgeld for 1 and 3 years up to 3.4%), September 2026. https://www.test.de/Zinsen-Neues-am-Zinsmarkt-6217294-0/
  7. Cbonds — German government bond yields (yield curve: 2 years at 3.22%), September 2026. https://cbonds.de/10-year-german-government-bond-yield/
  8. European Central Bank — Euro short-term rate (€STR): 2.439% on 29 September 2026, 2026. https://www.ecb.europa.eu/stats/financial_markets_and_interest_rates/euro_short_term_rate/html/index.en.html
  9. Einlagensicherungsgesetz (EinSiG) § 8 (€100,000 per depositor), § 14 (payout within 7 working days) — gesetze-im-internet.de, 2026. https://www.gesetze-im-internet.de/einsig/
  10. Europäische Zentralbank — Jahresbericht 2008 (fall in long-term eurozone government bond yields), 2009. https://www.ecb.europa.eu/pub/pdf/annrep/ar2008de.pdf
  11. European Central Bank — Monetary policy decisions, 10 September 2026 (deposit rate 2.50% from 16 September 2026), 2026. https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.mp260910~314e508016.en.html
  12. European Central Bank — Key ECB interest rates (rate history 2022–2026), 2026. https://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html
  13. Deutsche Finanzagentur — Bundesanleihen (smallest unit €0.01; no retail issues since 2013), 2026. https://www.deutsche-finanzagentur.de/bundeswertpapiere/bundeswertpapierarten/bundesanleihen
  14. Bundesministerium der Finanzen — Einzelfragen zur Abgeltungsteuer, letter of 14 May 2025 (Rn. 49–51: Stückzinsen paid as negative income), 2025. https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Abgeltungsteuer/2025-05-14-einzelfragen-zur-abgeltungsteuer.pdf
  15. Stiftung Warentest — Investition in Anleihen: Mit dem Bund auf Nummer sicher, 10 February 2026. https://www.test.de/Investition-in-Anleihen-Mit-dem-Bund-auf-Nummer-sicher-6271112-0/
  16. Einkommensteuergesetz § 20 Abs. 2 (redemption treated as a sale), Abs. 9 (Sparerpauschbetrag); § 32d (25% rate) — gesetze-im-internet.de, 2026. https://www.gesetze-im-internet.de/estg/__20.html
  17. Investmentsteuergesetz § 20 (Teilfreistellung: 30% for equity funds, 0% for bond funds) — gesetze-im-internet.de, 2026. https://www.gesetze-im-internet.de/invstg_2018/__20.html
  18. Bundesministerium der Finanzen — BMF-Schreiben vom 13.01.2026: Basiszins zur Berechnung der Vorabpauschale (3.20%), 2026. https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Investmentsteuer/2026-01-13-basiszins-berechnung-vorabpauschale.html
  19. BaFin — Einlagensicherung und Anlegerentschädigung (securities in a Depot remain the client's property; compensation of 90%, up to €20,000), 2026. https://www.bafin.de/DE/verbraucherinnen-verbraucher/themen-finanzprodukte/geldanlage/einlagensicherung-anlegerentschaedigung/einlagensicherung-anlegerentschaedigung_node.html
  20. Deutsche Finanzagentur — Factsheet 2,90% Bundesanleihe 2026 (2036), ISIN DE000BU2Z064 (2.90% coupon, yield 3.42% on 10 September 2026), 2026. https://www.deutsche-finanzagentur.de/bundeswertpapiere/factsheet/isin/DE000BU2Z064
  21. Deutsche Finanzagentur — overview of federal securities yields (10-year Bundesanleihen at 3.64% on 28 September 2026), 2026. https://www.deutsche-finanzagentur.de/