Private investors can generate decent income with investment funds. But many people still shy away from it. The fund purchase is very easy. You should be aware of this.
If you want to buy a share in a fund or ETF, you are further than many of your friends. Because the Germans shy away from this investment. Instead, they leave their money in the savings book – which hardly brings any income.
Purchasing funds is just as easy as opening a savings book, a day or fixed-term account. t-online.de shows you how it works and what you should pay attention to.
How do I buy a fund?
Basically, even if there is often talk of buying a fund or ETF, you are actually only buying part of a fund. There are several ways of doing this.
The classic way is through your house bank or savings bank. In this case, you instruct your bank advisor to buy a fund unit for you. To do this, he must first create a securities account for you, through which he can purchase the fund share.
The advisor then usually buys the fund share through the fund company that issues the fund. In most cases, the full so-called issue surcharge is due. This fee for launching the fund can sometimes amount to up to five percent of the investment amount, so it is very expensive.
However, it is also possible that your advisor buys the fund share for you on the stock exchange. This is often cheaper. Therefore, you should discuss this directly with your advisor.
It applies: The way through the bank advisor is straightforward, but also expensive. After all, banks let themselves be paid for the service they offer.
With direct banks on the Internet, you create a deposit yourself – and choose your desired fund. This saves you money compared to buying from a branch bank. Because direct banks usually offer a discount on the front-end load – often they even cancel it completely. In addition, there are no costs for a bank advisor.
However, it doesn’t matter that personal service is no longer available. Because the route via the direct bank is still very easy. It is best to follow these step-by-step instructions:
- Select direct bank: First you should consider which direct bank you would like to buy a fund unit through. Well-known banks are about ING, Consorsbank, DKB or Comdirect.
- Open a depot: Before you can start investing, you need to open a securities account. This is basically a kind of bank account in which you keep an overview of the fund units you have bought. You also need a so-called settlement account – this is where the transfers are made. This can be a conventional account – or you can open a bank account with the deposit.
- Select fund: In which funds would you like to invest your money? The choice of direct banks is huge. It is generally advisable to choose a fund that is as broadly diversified as possible. Index funds, also known as ETFs, are particularly cheap. There are no costs for a fund manager. Read something beforehand and compare several funds with one another. Every fund and ETF has a special identification number, the so-called ISIN. You can enter this in the order mask of your securities account in order to find the selected fund immediately.
- Choose a trading venue: You can buy a fund unit via the stock exchange, the issuing fund company or a direct dealer. You are often more flexible with the direct trader because you do not have to adhere to the trading hours of the exchange. The prices can differ per trader and stock exchange. Therefore, always make sure to get the cheapest price.
- Set the amount: Now you need to know exactly how much money you want to invest. Basically: Only invest money that you don’t need for anything else.
- Place Order: To do this, you have to enter a so-called transaction number, also known as a TAN. It’s similar to online banking. Now it’s time to wait – and see how your money works for you.
You can also buy a fund unit directly from a fund company that sets up this fund. To do this, you must also set up a securities account with the fund company. The remaining steps are mostly similar to those for direct banking.
It applies: When buying directly through a fund company, you have less choice. The costs can also be higher than with a direct bank.
What are the costs of buying a fund?
When you buy a fund unit, different costs are due. The most important are:
- Deposit fees: Branch banks in particular usually charge their customers an annual fee for custody account management. In contrast to this, a securities account with direct banks on the Internet is usually free of charge.
- Order fees: Order fees must be paid to the depository provider every time shares are bought or sold. With online brokers and direct banks, these are usually lump sums of five to ten euros. With some providers, a certain number of orders is also free.
- Trading venue fees: In addition to the order fees paid to the custodian, there are fees at the trading venue, i.e. where a broker or direct bank buys or sells your desired shares. Often the purchase takes place at an exchange. Buying shares from a so-called direct trader is usually cheaper than trading on the stock exchange. This means a securities dealer who holds stocks and fund units in stock.
- Management fees: These are the costs that a fund company charges for offering and operating a fund. These costs are often summarized in the “Total Expense Ratio”, or “TER” for short. ETFs are the cheapest here because there is no need to pay a fund manager to manage the assets.
- Subscription fee: The front-end load is determined by the fund company and expressed as a percentage. Often a discount is granted on this (see above).
- Additional costs: Exchange rate gains above the saver lump sum of 801 euros must be taxed in Germany. The so-called “final withholding tax” is a flat 25 percent of the income.
How do I sell a fund?
Selling a fund unit is basically the same as buying it: you can simply place an order in your custody account to sell a fund unit.
When setting up a custody account, you should pay attention to the cost of selling a fund unit. In many cases, the return to the fund company is free of charge – but it is possible that further costs are incurred by the depository provider.
Can I also transfer a fund?
That’s fine. You can transfer the fund shares you have bought to someone else – for example your child. The prerequisite for this, however, is that the other person has a securities account.
And this is how the transfer works: You have to fill out a corresponding form from your depository provider. You then have to sign this form and send it to your depository provider. How long the transfer takes varies. However, it should take a week or two at the most.
How do I buy a fund regularly?
This works with a savings plan – be it an ETF or a fund savings plan. You can also create this via your securities account. The prerequisite is that the fund in which you want to invest your money is eligible for a savings plan.
With a savings plan, you buy a share in a fund on a regular basis, e.g. monthly or quarterly. The highlight: You don’t have to invest a large amount at once. The time at which you start your investment is also irrelevant.
With a savings plan, the fund share is bought automatically once you have concluded the savings plan. Often, however, you can suspend installments if you are tight – or deposit more if you want.