Investing capital-forming benefits in an ETF

If your employer pays you so-called capital-building benefits, you shouldn’t say no. Even small sums of money can be worthwhile when invested in an ETF savings plan.

Get up to 40 euros more every month – and invest this money profitably: around 20 million people in Germany have this opportunity. The principle is called “capital-building benefits”.

Your employer will invest money for you, which you will receive in addition to your salary – for example in a bank or fund savings plan. However, if you can make up your mind, go for an ETF savings plan. We will show you why it can be worthwhile and what you should consider when “VL saving”.

What are capital formation benefits? benefits, also known as VL, can help you build up your wealth. It works like this: In addition to your salary, your employer pays a certain amount into a bank savings plan, building society contract or fund savings plan. You can usually have a say in which type of investment your employer should invest in.

Your employer pays a maximum of 40 euros per month (or 480 euros per year). However, if your employer pays less, you can top it up. This can also be worthwhile (see below).

A VL contract usually runs for seven years. Your employer pays you monthly for the first six years; the seventh year is a so-called rest year. Only then will you receive the money you have saved, including the income generated, called returns, paid out. However, you can continue to deposit money afterwards.

It is also possible that you receive money from the state in addition to the conventional VL, the so-called Employee savings allowance. For this you have to taxable profit as a single, however, are less than 20,000 euros a year. In this case, up to 20 percent will be funded, with a maximum of 80 euros per year. Therefore, it can also be worthwhile to make an additional deposit – because this way you can take advantage of the maximum funding amount from the state.

Are there ETF savings plans for VL?

Yes. You can also turn capital formation into one ETF savings plan deposit. In this case, your employer invests the VL in an index fund in which a computer algorithm reproduces a stock index such as the Dax.

The problem: Most providers of VL investment products only offer fund savings plans. There are only two providers who also sell ETF savings plans: Finvesto and Comdirect.

Both providers work with the custodian bank Ebase together. Therefore the conditions of the providers are similar:

  • Finvesto: Here there are only costs of 0.2 percent per transaction, i.e. per monthly deposit amount. At 40 euros a month, that’s just eight cents. In addition, there are custody fees of 10 euros per year.
  • Comdirect: As with Finvesto, the costs per transaction are only 0.2 percent. The custody account, on the other hand, is more expensive than with Finvesto. It costs 12 euros a year.

Is it worth an ETF savings plan for capital formation?

Yes. Because savings plans in ETFs are usually cheaper than Fund savings plans. After all, with ETFs there is no need to pay a fund manager who reallocates and manages the money invested. Compared to bank savings plans, ETF savings plans are advantageous because they have a significantly higher value Yield, called yield, discard. The reason: interest rates have been low for years and will probably remain so for quite a while.

You can also easily spread your risk with an ETF savings plan – for example with an ETF that tracks the MSCI World share index. Then your employer invests for you in more than 1,600 listed companies worldwide. A wide spread is considered very safe.

A exampleHow much wealth you can generate with a VL ETF savings plan:
We assume that you pay in the full VL amount of 480 euros annually, the annual return of the ETF averages six percent. After six years, you will have total assets of EUR 3,549. You have paid in 2,880 euros of this, 669 euros are income.


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