Keep Securities: How it works!

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Everything about the subject securities deposit *

Open a securities account and keep securities

Opening a securities account and keeping securities – that sounds really easy. Is it too, because if you have the necessary basic knowledge, the first hurdle is already taken. After that, you can look at the topic of “securities”, consult experts and get into trading. We clarify the basic information.

Basic information about the depot

What is a depot?
Often one speaks of the stock depot. That’s not really true, because you can not just keep stocks in a portfolio. The repository is the repository for all securities. This includes:

  • shares
  • bonds
  • fund
  • Certificates
  • Pfandbriefe
  • Federal securities

The deposit is therefore an account where you can hold and manage securities. After the purchase of securities, your holdings are booked there. This is a “virtual” entry: the securities are not kept in physical form at the respective bank. Rather, with the purchase of a security, you have the right to own it, including its value.

And then what exactly is a security?
The security is a property right, which is securitized to you in the form of a deed. This means that for every security you own, you can claim a certain amount of money, depending on what the paper is worth. In the case of shares, for example, the amount is based on the daily rate. In addition, there are dividends in this case in which investors participate.

Securities Depot – now I understand!
To hold securities, you need a depository. It is a virtual place where the bank holds your securities for you. These are therefore not in physical form in the possession of the credit institution, but are managed by this online.

Keep securities – step by step

Keep securities - step by step

Still the questions remain:

  • How can you open a depot?
  • How do the securities get into the custody account?
  • And then how does the trade take place?

Open depot
Securities are therefore stored in a custody account. But how do you open one? It’s really easy. First of all you have to choose a bank where you want to keep your deposit. In order to open the securities account, the bank needs some information, such as:

  • Information about the person (name, contact details, employment etc.)
  • Information on the financial situation
  • Information about the job situation

If you are already a customer of a bank, after entering this information, you really only have to wait for the deposit to be confirmed by the bank.
As a new customer you have to legitimize yourself. This is usually done through a PostIdent procedure. After entering your details, the bank will send you a letter. With this and your ID card, you go to a post office, where a local employee compares and confirms your details in the application to the bank with those on the ID card.

What about the securities deposit? *

How do you transfer the securities to the custody account and how do you proceed?
Once you have opened a portfolio, you can start buying and selling securities. You can usually send an order online or by phone to the bank. This will give you an order. The bank then executes the order, for example by crediting you with the money. For this you need a separate clearing account. This is a checking account on which the purchase price, interest payments, dividends or purchase proceeds are booked.

Does the storage cost money?
Whether and what costs are incurred when you hold securities in a custody account varies from bank to bank.

  • There are credit institutions which require custody account fees for the safekeeping of securities.
  • Meanwhile, there are also a variety of free depots. In other words, simply storing securities does not cost you anything at first. This sometimes requires at least one order per quarter or a specific value per order. For the purchase or sale of securities, however, so-called trading fees. This is, for example, an initial charge for funds or commission costs.

Do you want to transfer your deposit, for example, because there is a lower cost for another bank? That is basically no problem and free for you. Simply submit an application to your “new” bank. Usually this then takes over the change for you. The old bank gets notified, transfers your securities and closes the deposit.
Tip: Often a deposit change can be worth twice, because you may not only save costs. Many banks offer you particularly lucrative terms when you open a portfolio and keep your securities there.

Securities hold – Are there different types of custody?

Securities hold - Are there different types of custody?

If you want to keep securities, you basically have two options for banks:

  • Special Custody: The Bank retains your securities separately from the remaining securities of other clients.
  • Collective Safe Custody: In this case, your securities will be kept with those of other clients and the securities of the credit institution. For this type of custody, you must explicitly seize the bank. The decisive difference to special custody is that you are granted a co-ownership of the entire custody account of the bank in this type of custody. In that case, you can no longer just have “your” securities issued, but only the fraction, depending on the denominations or quantities of your securities.

Which securities should one keep in his custody account?

In principle, it is difficult to make a recommendation for individual securities. In the case of equities, for example, financial success always depends on the current share price. In general, however, it is advisable to set up a securities deposit. Therefore, ensure that your portfolio is diversified by, for example, investing in securities of different companies. Then you have the chance to offset potential losses from gains on individual securities. Whenever you trade stocks, bonds, funds, or the like, you should get involved with it in advance. Especially as a newcomer with little or no experience, it is advisable to get advice from experts.

3 tricks to lower the cost of your loans

 personal loansWhen applying for funding, whatever the purpose we want to give, we compare and invest a large amount of time to find the best personal loan offers . Thanks to the “war of credits” that currently exists between the different financial entities, finding cheap loans is relatively easy , but regardless of the offer, there are some tricks that can help us save interest.






The first thing we have to take into account when paying less interest on our loans is to find the financing offer that best suits our needs . For this it is important to know how much money we want to request, the repayment period that best suits us, the flexibility we want to have available and the speed with which we need financing. Next, the best current personal loan offers:

Knowing how to analyze our economic needs is one of the key points not to overspend . Knowing the right budget we need and not asking for more funding or waiting and saving a little more, for example, will help us pay less interest since interest will be generated on less capital.

The keys to not overpay for our credits

   Once we have compared and chosen the cheapest personal loan that best suits our needs we can apply these simple tricks to save on the interest of the financing we are going to hire:

1.- Amortize whenever we can:

Amortize is to reimburse part or all of the credit before the agreed return period ends. In the case of finding ourselves with extra liquidity we can always amortize the loans since if we return the capital before time, the interests will be lower.

Some loans charge a commission for performing these amortizations (between 0.5% and 1%) in these cases we must calculate which of the two options will be the cheapest if you pay the commission and return the credit ahead of time or finish repaying the credit in the determined term.

In the event that we carry out a partial amortization, we will have two options: (1) have a smaller installment during the same repayment period or (2) remain with the same installments and shorten the repayment period . The second option will be the one that saves us more interest.

2.- The term matters

Although it seems a not so influential factor is one of the most can save us. The longer the repayment period, the more interest will be generated and therefore, although smaller installments are more comfortable, we must choose the shortest possible term as long as these monthly payments do not exceed 35% of our income , that is, if we charge € 1,000 net per month, the loan installments must not exceed € 350 per month.

To see easily and conveniently how much the term affects the interest savings, in the following table we can see how many interests will generate the same credit of € 10,000 to 7% during different amortization periods:

Quantity Interests Term Monthly fee Total to pay Generated interests
€ 10,000 7% 24 months € 448 € 10,745 € 745
€ 10,000 7% 36 months € 308 € 11,115 € 1,115
€ 10,000 7% 48 months € 239 € 11,494 € 1,494

As we can see, the difference between repaying a loan in 2 years or in 4 years means a saving of € 750, a difference that will increase if the amount or term increase . We must bear in mind that we can not all afford to pay almost € 450 a month to repay our loans, but we should always try to choose the shortest time within our economic possibilities.

3.- Take advantage of the links

Last but not least, we must take advantage of the links offered by the credits. Although the links are seen as something negative, we can take advantage of them.

There are many loans that currently offer the hiring of products linked optionally in exchange for discounts on interest on loans . This can mean an important saving, but we must take into account the additional cost that these linked products suppose since, although this cost does not appear in the APR, it will indirectly affect the total cost of the credit.

In the case of optional linkages such as the direct debit of a payroll or receipts, where the associated accounts have no costs , we should hire them in exchange for a reduction in the cost of our financing. On the other hand, if these products have associated costs such as contracting insurance or the minimum use of a credit card, we must calculate which of the two options is the cheapest before linking or not.

With these simple tips we make sure to choose the loans that best suit us so as not to overpay for the financing we request. Analyzing our economic situation and our financing needs before hiring any type of loan assures us that we will obtain a fair price for the money we request.