There was a time when an investment without a bank was considered unthinkable. At that time, most people went to the house bank with their own local branch and had the friendly bank advisor sell the corresponding investments.

The savings account was very popular and solid interest rates could be generated with fixed-term deposits and building savings contracts. Conversely, the purchase of real estate or the receipt of a loan was extremely expensive.For 1980 and most of the 1970s, the average annual percentage rate was over 11%.

Today, people are between one and two percent, yet real estate values are rising.
Since many alternative products have joined the market, investing without a bank offers respectable returns.

What distinguishes investing without a bank?

Basically, it goes without saying what makes an investment without a bank.

It is the leaner structures and the lack of superstructure that have a cost-saving effect and ensure that in many cases more money gets stuck when investing without a bank.

A prime example is the management of equity or other funds. If you choose the house bank here, you often have to pay issue surcharges, custody fees and account fees. In addition, there are costs for transactions, participation in profit and other costs for certain services. S

First, advice is no longer free, therefore the bank gets a big chunk of the invested money.
This is not the case for investments without banks, and the additional costs are lower or even zero.

Investing money – how does it even work?

Admittedly, stories from previous years always sound like “good old times.” How easy is it if you have known the bank advisor for many years and simply put your savings on savings account at a solid interest rate? Products such as fixed-term money or overnight money or even a savings plan were already considered complex to many end customers and the competence of the advisory staff was beyond question.

And today? Banks are subject to change like hardly any other industry. Meanwhile, almost every local bank is becoming a “global player” and offers products that are difficult to understand.

There is discussion of capital-forming life insurance, as well as open-end and closed-end investment funds, premium savings, Dax savings books, and real estate funds.
Many so-called experts also factor in gold, silver, tangible assets, and real estate, in addition to things like bitcoins.

Due to the deluge of new goods and investment opportunities, some bank staff have lost track.
Bank advisors are also bound by their employer’s interests.
Thus, advised items benefit the bank more than the customer.

If you know some basic words, you may explain the investment without a bank or with a bank.
Anyone who invests time and researches finance and financial goods rapidly becomes a self-decision-maker who can see market possibilities and find their own risk mix.

Investment procedures

Simply said, money can be borrowed through a savings account, fixed-term deposit, government bonds, or crowdinvesting to buy real assets like shares or fund shares.

In the case of tangible assets, a dividend, which is paid regularly, is sometimes attracted, and speculation is also made on an increase in value. A simple example: you buy gold or a work of art and try to sell it at a profit after a certain time. For shares, a regular dividend may be added if the price has developed accordingly.

The money is lending at a fixed interest rate, which is very low today. Only those who show a little risk appetite can generate high returns through alternative forms such as crowdinvesting. This is made possible, for example, by a subordinated loan, which is of course largely secured.

However, even when investing without a bank, the simple formula applies that more return is associated with greater risk and more security reduces the return.

What possibilities of investing without a bank exist?

The possibilities of investing without a bank are manifold and have some products ready that have only existed for a short time. Above all, the existence of the Internet and the associated digital technologies has created new possibilities, the attractiveness of which is enormous.

It is particularly exciting that when investing without a bank – as the name suggests – no mediating authority is required anymore, but can be invested directly in good business ideas or models.

Of course, we are talking about crowdfunding or crowdinvesting, which is a new form of investment with exciting return expectations. The principle behind it is comparatively simple and 100 percent transparent.

A company needs money that it does not want to borrow from a bank or a credit institution. Instead, there is the possibility of granting a subordinated loan, which takes the form of crowdinvesting. The invested money is remunerated at a fixed rate and yields a significantly higher return than fixed-term money or overnight money would do at the bank. On the other hand, of course, there is an entrepreneurial risk, i.e. the investment can also be partially lost.

Another feature of crowdinvesting is transparency. Investors in a corporation will learn about its project and security.

The investment time horizon is carefully set to assure a capital return within a few years.

Crowdinvesting is bankless since just a technical platform is needed to connect investors and companies.

This serves the purpose of securing the data and documenting the flow of money and also provides up-to-date information. This is not a bank and, above all, no costs or fees are charged.

Other ways of investing

Crowdinvesting is one of the best non-bank investment possibilities, however other options should be mentioned.

There are, for example, the properties much mentioned in the media.Cryptocurrency speculation is riskier.
he method is error-prone, therefore “Bitcoin billionaires” may lose money.
If not, banks as lenders are on board.

Cryptocurrency speculation is riskier.
“Bitcoin billionaires” are often reported, however the system is error-prone and could lead to loss. . Real estate becomes a rather complicated form of investment without a bank, but is (still) in a good reputation.

Cryptocurrency speculation is riskier.

“Bitcoin billionaires” are often reported, however the system is error-prone and could lead to loss. Cryptocurrencies are also anything but transparent.

Finally, for the sake of completeness, tangible assets should also be mentioned as an investment without a bank. You can profit if you know about premium wines, whiskeys, historic vehicles, and designer furniture.
However, market expertise and luck are rarely enough to succeed here.