400 billion euros under the pillow: Why cash love costs Germans dearly
The advantages of cash are obvious: You can easily keep an eye on your spending, pay anonymously, do not depend on ATMs and notes and coins are accepted almost everywhere. For many Germans, the principle therefore applies: “Cash is true.” But this preference costs them billions every year, as stored money does not yield any returns or interest. Anyone who wants to build up wealth over the long term therefore needs a sensibly structured portfolio.
Cash: Hoarded at home, withdrawing at the cash register
Despite low to zero interest rates, new regulations and an increasing number of digital investment options, the love of German citizens for cash remains unabated: According to the Bundesbank, households had around 400 billion euros in cash at the end of 2024. Although money is increasingly being “stashed away” privately, it continues to lose importance in everyday life: According to the”Payments and Open Banking Survey 2025” by Strategy&, PwC's global strategy consultancy, at the beginning of 2025, only 35% of the Germans surveyed preferred to pay with cash, which represents a decline of almost 20 percentage points compared to 2022. Mobile payments, contactless payments and digital wallets, on the other hand, are experiencing an upswing that is likely to further shape payment behavior. There are also regulatory cash limits, as the European Union (EU) has set a new rule in payment transactions: From 2027, amounts over 10,000 euros may no longer be paid with cash. This restriction is intended to curb money laundering and the financing of terrorism. The new regulation is also likely to make it more difficult to avoid sanctions.
Popular cash under pressure
The “Payments and Open Banking Survey” outlines how the value of cash could change by 2037 based on three possible developments. A first scenario describes a “hyperdigital payment world,” in which cash has largely disappeared from everyday life. Options to withdraw cash have become scarce, and even in supermarkets or among friends, payments are almost exclusively made digitally. For example via smartphone, smartwatch or biometric authentication.
A second scenario describes a possible “cash renaissance.” In an increasingly digital and connected world, people could once again appreciate the benefits of cash — such as its anonymity, independence, and tangibility. A return to traditional means of payment would also be possible as a response to data protection concerns or technological overload.
The third scenario describes a “disappearing hybrid payment world.” Cash remains formally available here, but access is becoming increasingly restricted: bank branches and ATMs are becoming rarer, and handling notes and coins is becoming less practical. As a result, usage falls steadily until cash is gradually phased out of everyday life, but without being officially abolished.
However, security concerns about digital payment methods and financial investments are currently still a main reason for the continued hoarding of cash combined with a lack of financial knowledge. But this caution costs returns.
Cash owners miss out on return opportunities
The 400 billion cash hoarded corresponds to just under 5,000 euros per capita — a significant sum that is largely idle from an economic point of view. What many underestimate is that this money loses purchasing power with every month. Assuming inflation of 3%, the real value falls by around a quarter within ten years. Or to put it in figures: Anyone who “leaves 10,000 euros lying around” in cash for ten years loses around 2,500 euros due to inflation alone. The situation is different when it comes to capital market investments, for example: Global stock indices such as the MSCI World yielded around 4-6% returns per year on average. At an exemplary 5%, the amount of 10,000 euros would therefore have risen to over 16,000 euros after ten years.
In addition to the stock market, however, the financial markets now offer numerous innovative opportunities to diversify your own portfolio and thus avoid cluster risks. For example, private markets — a segment that used to be reserved only for rich investors and institutional groups.
However, thanks to digital tangible asset shares on the blockchain, retail investors can now also use Platforms like FINEXITY Invest in exclusive tangible assets — including real estate, art, wine or rare watches — starting at 500 euros. In doing so, investors and owners benefit from the potential return opportunities of their digital tangible assets investments, which can be put together in a diversified portfolio.
In summary, cash may seem to offer more control (apart from the risk of theft). In the long term, however, notes and coins stored at home are capital destroyers. Anyone who instead invests as broadly as possible in tangible assets benefits from return opportunities, protects themselves from inflation and falling interest rates, and builds up wealth sustainably.
