Building Savings
A state-supported savings and loan product designed to help fund housing, popular across Central Europe.
Building savings is a fixed-term product, common in countries like Germany, Austria, and the Czech Republic, that combines regular saving with a state bonus and the option of a favourable housing loan later. You save for a set number of years, earning interest plus the bonus, and can then access a low-rate loan for housing if you wish. It rewards disciplined, medium-term saving and is one of the safer ways to grow money earmarked for a home. The main constraints are the minimum term and a cap on the bonus. It is best suited to money you can commit for several years.
Example
Saving regularly for six years earns interest plus an annual state bonus, and you can later draw a favourable loan toward buying or renovating a home.
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Related terms
Savings Account
A bank account that pays interest on your balance while keeping the money easily accessible.
Interest Rate
The percentage charged on borrowed money or earned on deposited/invested money, expressed as an annual rate.
Mortgage
A long-term loan secured by real property, used to finance the purchase of a home or investment property, typically repaid over 15–30 years.
Savings Rate
The percentage of income saved or invested rather than spent, widely considered the most important factor in building wealth.
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