In the current interest rate environment, corporate bonds offering yields of up to 9.03% present an interesting alternative to more traditional investment forms such as savings accounts and real estate. The low interest rates necessitate the search for better yield opportunities.
Why are these bonds an attractive alternative?
- Savings accounts currently offer very low returns, often well below 1%, which translates to real negative returns considering inflation.
- Real estate is traditionally popular, but it carries disadvantages such as high investment costs, management effort, and lack of flexibility. Moreover, sufficient diversification is typically only possible with substantial wealth.
In contrast, certain corporate bonds provide a diversified portfolio with calculable risks and medium-term maturities as well as significantly higher yield potentials.
Current Interest Rate Situation in Germany
- The yield on the 10-year German government bond currently stands at about 2.69% (as of July 2025), having slightly increased in recent months. Historically, however, the yield was above 9% (1990).
- These government bond yields are markedly lower in comparison to the aforementioned corporate bonds.
Example Bond Issuers
An example from the article is Deutsche Rohstoff AG, a company involved in oil and gas exploration with a solid equity ratio (~43%) and profitable business development. Such corporate bonds can provide investors with an opportunity to achieve higher ongoing returns.
Conclusion
For private investors and retail investors, selected corporate bonds currently represent an attractive opportunity to generate passive income – better yielding than savings accounts – without the inflexibility or effort associated with real estate investments. With yields of up to around 9%, they offer an interesting compromise between risk and return, especially in an environment of declining or low-interest rates.