How to invest €100,000? Tips from Financial Experts

Having money solves many problems, but letting it accumulate in your bank account with little to no return creates a new one: how do you monetise €100,000? What kinds of investments are available to retail investors? What risks does each investment carry? And how do you choose between the dozens of available options for putting your money to work?

In this article, we’ll cover several options for investing your hard-earned money – from risk-free to higher-risk investments. Whether you have €100, €100,000, or even €1,000,000 in your bank account, the principles and options below should be relevant.

Please note: this is not financial advice. Consult a professional registered with your local financial regulator before making significant investment decisions, particularly given how tax treatment varies significantly across European jurisdictions.

1. Risk-free and low-risk investments

Despite traditional banks paying very little (often nothing) on uninvested cash, you can earn meaningfully better interest through several specialised brokers. We’ve published a full list of brokers paying interest on cash, but here we’ll focus on the two strongest options:

Trade Republic – risk-free option

Trade Republic pays competitive interest on uninvested cash with no balance limit – rates have generally tracked the ECB deposit facility rate. Your cash is held in a deposit account with a financial institution and is protected up to €100,000 per depositor under the German Deposit Guarantee Scheme.

The interest rate is tied directly to ECB monetary policy. For example, after the ECB cut rates by 0.25% (from 2.25% to 2.00%) on June 5, 2025, Trade Republic immediately adjusted its rate to 2.00% to reflect the new underlying rate. Trade Republic also uses money market funds (MMFs) for some cash allocations – these are still low-risk but carry slightly more risk than pure deposit accounts.

For €100,000, only the first €100K is protected under the German Deposit Guarantee Scheme – so a full €100K position sits right at the edge of coverage. For larger amounts, splitting across multiple providers helps ensure full deposit protection.

For more details, see our article on Trade Republic interest rates.

Trading 212 – low-risk option

Trading 212 pays competitive interest on uninvested cash regardless of the balance amount. EUR rates currently sit around 2% (varying with ECB moves), and GBP rates are around 3.85% for UK investors. Whether you have €1 or €1,000,000, you receive the same rate.

European investors can claim a free fractional share worth up to €100 by signing up with our Trading 212 promo code: IITW.

Trading 212 uses a combination of qualifying money market funds (QMMFs), time deposits, and current accounts to deliver these rates. QMMFs invest in short-term debt securities like government bonds and aim to maintain stable share prices.

Client funds and assets are protected up to €20,000 under the Cyprus Investor Compensation Scheme (ICS) for EU clients, or £85,000 under the UK Financial Services Compensation Scheme (FSCS) for UK clients – depending on which entity holds your account.

For more details, see our article on Trading 212 interest on cash.

2. Low to intermediate-risk investments

Moving up the risk scale, you can consider bond ETFs.

Bonds are loans made by governments or corporations to obtain financing. In exchange, investors receive interest payments over a set period and (assuming the borrower doesn’t default) get their principal back at maturity. The total return combines the interest received along the way and the final return of principal.

Bond ETFs bundle multiple bonds into a single product. So instead of buying one government bond directly, you can buy a Government Bond ETF holding dozens or hundreds of different bonds (from Germany, France, Italy, Spain, etc.) – achieving instant diversification.

Four key characteristics to weigh when choosing a bond ETF:

1. Credit rating: indicates how likely the bond issuers are to repay their debt. The higher the rating (AAA, AA, A, etc.), the lower the default risk and the lower the typical yield. Government bond ETFs from developed markets usually carry higher ratings than corporate bond ETFs.
2. Yield to Maturity (YTM): the average expected return across all bonds in the ETF’s portfolio if held to maturity, assuming no defaults.
3. Duration: measures the ETF’s sensitivity to interest rate changes. A duration of 5 means a 1 percentage point rise in interest rates would cause an approximate 5% drop in the ETF’s value (and vice versa for rate cuts). Higher duration = more interest rate sensitivity.
4. Annual cost (TER): the ongoing cost of running the fund. A 0.10% TER means €100 in annual costs per €100,000 invested.

Two examples of bond ETFs commonly used by European investors:

iShares Core EUR Government Bond UCITS ETF (IEGA) – government bond ETF (factsheet):

Tracks an index of Eurozone investment-grade government bonds. Approximate data:

• Credit rating: AA
• Yield to maturity: ~3.2%
• Duration: ~6.9 years
• TER: 0.07%

iShares Core EUR Corporate Bond UCITS ETF (IEAC) – corporate bond ETF (factsheet):

Tracks an index of EUR-denominated investment-grade corporate bonds. Approximate data:

• Credit rating: BBB
• Yield to maturity: ~3.7%
• Duration: ~4.5 years
• TER: 0.20%

3. Intermediate to high-risk investments

Invest in an ETF tracking the S&P 500

The S&P 500 is the major US index covering the 500 largest US-listed companies – representing approximately 80% of total US equity market capitalisation. You can easily invest in this index through UCITS ETFs available to European investors, with TERs typically as low as 0.03% for the cheapest options. Strong options include:

• SPYL (SPDR S&P 500 UCITS ETF) – 0.03% TER, the cheapest option;
• CSP1/CSPX (iShares Core S&P 500 UCITS ETF) – 0.07% TER;
• VUSA/VUAG (Vanguard S&P 500 UCITS ETF) – 0.07% TER, distributing and accumulating versions;
• SPXP (Invesco S&P 500 UCITS ETF) – 0.05% TER, synthetic structure (avoids US dividend withholding tax via swap-based replication).

Our article How to invest in the S&P 500 from Europe covers everything you need to know. Watch our video for more:

Invest in a Vanguard LifeStrategy fund

Vanguard offers a range of one-stop diversified funds called Vanguard LifeStrategy, blending stocks, bonds, and cash with automatic rebalancing over time. These let you pick an asset allocation that matches your risk tolerance and goals, all for a single low management fee (TER typically around 0.25%). Available LifeStrategy UCITS ETFs for European investors (UK investors can find these funds here):

• Vanguard LifeStrategy 20% Equity UCITS ETF (conservative, bond-heavy);
• Vanguard LifeStrategy 40% Equity UCITS ETF (cautious balanced);
• Vanguard LifeStrategy 60% Equity UCITS ETF (balanced);
• Vanguard LifeStrategy 80% Equity UCITS ETF (growth-oriented).

As the names imply, equity exposure ranges from 20% to 80%, with the rest invested in global government and corporate bonds across developed and emerging markets.

To invest in S&P 500 ETFs or Vanguard LifeStrategy funds, you’ll need to open an account with a European broker. Compare fees, minimum deposits, regulatory protection, and the availability of the specific assets you want to trade.

Our broker comparison tool lets you compare multiple brokers side by side.

Common investing mistakes to avoid

Investing isn’t just about choosing the right assets – it’s also about avoiding the common pitfalls that derail long-term returns. Here are the most common mistakes to watch out for:

Emotional trading

Making investment decisions based on emotions rather than analysis. Common safeguards:

• Understand market cycles: markets rise and fall in cycles. Emotional traders often panic-sell during downturns at depressed prices – missing the recovery that historically follows.
• Stick to your plan: develop a well-thought-out written investment plan and stick to it, even when emotions run high. Predefined buy and sell criteria help insulate you from short-term market noise.
• Patience: investing is a long-term game (decades, not months). Resist impulsive decisions based on short-term moves.
• Avoid the herd mentality: humans naturally follow the crowd, but successful long-term investing often requires going against it. Base decisions on your own research, not on what’s trending on social media.

Chasing returns

Investing in assets that have recently performed well without considering their future potential or underlying risks – the classic buy high, sell low trap. Safeguards:

• Diversification: instead of concentrating in the latest hot stock or sector, diversify across asset classes or use broad-market vehicles like an S&P 500 ETF or a Vanguard LifeStrategy fund.
• Long-term perspective: short-term trends rarely sustain. Past performance does not guarantee future results – and the hottest sectors of one decade are often the worst-performing of the next.
• Be sceptical of hype: investments heavily promoted by media or online communities deserve extra scrutiny. The current example: the AI investing story, which has driven extraordinary returns in some names but also extraordinary valuations that depend on continued execution.

The bottom line

The investment options above are far from exhaustive. You could also consider non-traditional investments like luxury watches, fine art, peer-to-peer lending, private credit, or venture capital. However, based on our experience, these alternatives are generally not worth the risk for most retail investors – they tend to be opaque (limited public pricing data), illiquid (hard to exit when you want), and often carry hidden risks that aren’t apparent until something goes wrong.

For most retail investors, building a diversified portfolio of cash, bonds, and equities through low-cost UCITS ETFs is the smartest approach – rather than trying to beat the market with specific stock picks or chasing exotic asset classes. A simple allocation framework worth considering for €100,000:

• Emergency fund and short-term needs (3-12 months expenses): high-interest cash account (Trade Republic, Trading 212).
• Medium-term goals (1-5 years): bond ETFs (IEGA government bonds, IEAC corporate bonds).
• Long-term goals (5+ years): equity ETFs (S&P 500 UCITS, Vanguard LifeStrategy) or other broad-market exposure.

The exact allocation depends on your specific situation – age, income stability, dependents, risk tolerance, tax framework in your country, and long-term goals.

For further reading, explore our recommended books and courses. If you have questions or feedback, feel free to contact us.