Rentenbank is a public law institution based in Frankfurt am Main

Its full name is Agricultural Rentenbank. It was founded on 11 May 1949 by law (Law on the Agricultural Rentenbank) and had at that time the goal to support the agricultural sector by cheap loans and to refinance the agriculture and food industry.

Today, Rentenbank is an important partner in low-interest lending for agricultural investment. Its total assets in 2016 amounted to more than 86 billion euros. As an institution under public law, the Confederation is the bearer of the financial burden. Since 2014, the Rentenbankgesetz has also stated that the Confederation is liable for all liabilities of the Bank. The legal supervision of the Landwirtschaftliche Rentenbank is carried out by the Federal Ministry of Food and Agriculture.

After its founding in 1949, the capital stock was raised by German agriculture and forestry until 1958. Balance sheet profits are used to support agriculture and rural areas.

The Rentenbank has nothing to do with the pension

Even if the term “Rentenbank” suggests otherwise, the Rentenbank has nothing to do with the payment of pensions in the modern sense. Rather, the term goes back to the “pensions”, so easements, the farmers had to pay earlier to the landlords. As part of the liberation of peasants in the 19th century, these easements were dissolved. In order to reduce the losses for the landlords, so-called “pension banks” were created. These banks issued bonds to the landlords. The farmers, in turn, paid fixed sums of money to the bank. The bank was then able to pay interest and repay the bonds.

Target groups and objectives of Rentenbank

Target groups and objectives of Rentenbank

In general, Rentenbank defines its products as “loans for a variety of agricultural investments”. Accordingly, the following actors belong to the target groups of the bank:

  • Farms
  • Forestry operations
  • Farms in the fish industry and aquaculture
  • wine producers
  • horticulturists
  • Manufacturer of agricultural inputs
  • Traders or service providers with close links to the agricultural sector

In addition, the Landwirtschaftliche Rentenbank is also active as a financing partner for municipalities and municipalities and supports innovations and investments in renewable energies. As a promotional bank for the development of rural areas, the Federal Financial Institution is also active. In this sense, private individuals are also among the target groups of Rentenbank, if they make investments to improve and develop living conditions in rural areas.

One of the main objectives of the Landwirtschaftliche Rentenbank is to refinance the further development of the agri-food sector. All players involved in these sectors can take advantage of the Bank’s soft loans. In this way, the state, as the “owner” of the bank, ensures sustainable investment in rural areas as well as renewable energy and innovation.

How does the Rentenbank work?

Rentenbank differs from a conventional private bank in that it is a public-law institution and part of the federal government. The federal government is also responsible for the financing of the credit institution. Similar to the Kreditanstalt für Wiederaufbau (Reconstruction Loan Corporation), Rentenbank does not lend money directly in its own branches; instead, these loans are offered to savings banks and Volksbanks in a competition-neutral manner. This means that customers receive the loans from all the participating banks on the same terms.

One of the main tasks of the Landwirtschaftliche Rentenbank is to lend money in order to promote investment in the agri-food sector. Since the bank is managed by the federal government and the federal government provides the necessary collateral for the bank, it can refinance itself very cheaply via the capital market and thereby issue even cheap loans.

Subsidy and interest

Subsidy and interest

Eligible for funding is all borrowers who belong to the target groups of Rentenbank and who are directly or indirectly involved in agriculture or the food industry. The focus of the promotion is on farmers. Here Rentenbank even offers special programs for young farmers up to age 41.

Creditworthiness and collateral

Creditworthiness and collateral

As with any other loan, a loan from Rentenbank will use the creditor’s credit rating from the lending bank for lending. In addition, the value of the collateral provided is included. On the basis of this data, the applicants are divided into certain “collateral classes”, corresponding to the scoring of the house banks.

Based on the respective collateral class and credit rating class, the corresponding annual percentage rate is determined. As a rule, Rentenbank’s loans also increase the chance of a loan with higher creditworthiness and higher collateral.

Maturities at Rentenbank

Since the loans requested at Rentenbank are usually larger investments, it is also possible to use very long terms. Possible terms of up to 30 years with fixed rate fixation. Upon request, individual terms can also be agreed on site.

Loan calculator of the Rentenbank

If you would like to receive detailed conditions on loans from Rentenbank, you can contact a savings bank or Volksbank in your area. To get the first indication of credit costs and installments, the free loan calculator Rentenbank is available.

A loan with negative interest

Loan with negative interest

Due to the ongoing low-interest rate policy and the top ratings with the federal government as the bearer of the Anstaltslast, Rentenbank also benefits from the conditions on the capital market. Since the federal government issues bonds for which buyers have to pay interest, it is possible for the Rentenbank to grant loans on very favorable terms. The development on the capital market has even led to Rentenbank theoretically spending its loans with negative interest rates.

However, since Rentenbank’s loans are issued through the house banks, there were technical as well as legal objections for a negative interest loan. For example, such a loan would violate competition rules. For this reason, Rentenbank has been offering loans with a so-called subsidy since April 2017. For certain financing products, this subsidy is one percent of the loan amount and will be offset against the installments and interest.

In this way, it is possible that short-term loans with a smaller volume, at least in the first repayment phase, theoretically have “negative interest” or are repaid without interest- same or the next How long there will be the subsidy from Rentenbank is open. Presumably, this particular form of loan depends on the base rate of the European Central Bank. If this interest rate rises, so do the refinancing costs, and thus the Rentenbank would also have to raise its lending rates.




As with private banks, refinancing also takes place at Rentenbank via the global capital markets. This allows the federal-backed bank to provide fresh capital, which it passes on to its clients in the form of loans. The usual refinancing methods of the Landwirtschaftliche Rentenbank include issuing bonds or securities. It is up to the promotional bank whether it issues covered or unsecured securities.

Today, mostly uncovered bonds or securities are issued. This means that the bonds of the bank are not covered by mortgages to public debtors. The financial power of the bank alone is enough to cover. Rentenbank can proceed in this way, as it has been rated by rating agencies with the highest grade Triple-A for many years.

Advantages and disadvantages

Advantages and disadvantages


advantages disadvantage
  • Interest rates are based heavily on the key interest rate and are therefore currently very low
  • Lending is easy via the participating house banks
  • The loan amount can be repaid over many years
  • There are many different variants of development and investment loans
  • Banks can charge processing fees for the loans
  • The loans are always earmarked
  • Lending is only possible for a limited circle
  • Private individuals benefit only slightly from the offer

possible alternatives

If you are looking for funding opportunities for your company or your investment, you can also take advantage of potential funding programs offered by KfW or the BaFa. Both institutions are also operated by the federal government and offer, for example, favorable loans when it comes to sustainability in the energy industry.

Regional support is often possible through special regional subsidies via districts, federal states or municipalities. Here the interested parties have to turn directly to the respective administrations.