Many people take out funeral insurance to ensure that their funeral can be paid for. Other people choose to save for their funeral themselves. Is saving or bank saving for the funeral a good alternative?
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Save money on the bank instead of insuring?
Saving for your funeral instead of insuring can have advantages. Because if you take out a funeral insurance policy, you are not always insured for all costs involved in the funeral. If you save before your funeral, the savings interest often means that you have a larger amount available for your funeral than when you take out insurance. Certainly if you can save for a longer time because you are reaching an old age. The risk of saving is that you have not saved enough if you die at a young age.
If you want to save before your funeral, assume that you usually have more than enough for 10,000 euros. But the exact duration of your funeral depends entirely on your wishes.
Save for funeral
Bank saving means that you put your money in a blocked account and save for a certain purpose, such as your pension. Since 2010, it was also legally permitted to save tax-free for a funeral with bank saving. Because no bank has ever offered the product bank saving for the funeral, the exemption was lifted again on January 1, 2016. Tax-free bank saving for your funeral is therefore not possible.
What you can do is save yourself on a deposit, for example. A savings deposit is a savings account where you deposit your money for a longer period of time. In exchange, you will receive a higher interest rate than on freely withdrawable savings accounts. Savings deposits run for a minimum of 1 month to a maximum of 20 years. The savings are only released when the term has expired or upon death. Unfortunately, a savings deposit does not offer a tax benefit.
You can easily compare savings deposits from all banks. This way you can immediately see how much a deposit currently yields interest. Money that you set aside for your funeral can be set aside for a longer period of time. But if interest rates are low, it is better to wait a while before securing your money for a long period.
Save for funeral with funeral insurer
Saving for your funeral is also possible at funeral insurance companies. These companies offer savings deposits especially for your funeral. The amount saved is paid out at the time of death. The interest rates of these funeral deposits currently vary from 0 percent to 4 percent. Make sure that the minimum stake also differs greatly. You do not need a minimum deposit for one account, and € 5,000 for the other. Just as with regular savings accounts, it is therefore important to compare the various providers well.
Tip! At the moment you can only open a bank savings account with a tax benefit for your pension. A condition is that you have annual space or reserve space.
You compare the largest selection of savings accounts. This way you will certainly find the savings account with the highest interest and best conditions. Growing your savings becomes very easy! Compare savings interest.