ETF Savings Plans in Germany
Explained From Scratch
The most popular investment method in Germany: set up a monthly automatic purchase of a global ETF, let it run for years, and watch compound interest do the heavy lifting. Over 21 million Germans used ETF or fund savings plans in 2024. This guide explains exactly how they work, which ETFs make sense, which brokers charge nothing, and how to handle German taxes — so you can start in the next 15 minutes.
What is a Sparplan?
A Sparplan (savings plan) is an automated recurring investment. You choose an ETF, set a fixed amount — as low as €1 — and pick a frequency: weekly, biweekly, or monthly. On execution day, your broker automatically buys that ETF at the current market price using the amount you set. No decision-making, no market timing, no manual action.
This approach is called dollar-cost averaging (DCA): because you buy the same euro amount every month regardless of price, you automatically buy more units when prices are low and fewer when prices are high. Over time, this smooths out market volatility and produces an average cost per unit that is typically lower than the average price over the same period.
How dollar-cost averaging works
| Month | You invest | ETF price | Units bought | Total units |
|---|---|---|---|---|
| January | 100 € | 50 € | 2,00 | 2,00 |
| February | 100 € | 40 € (market dip) | 2,50 | 4,50 |
| March | 100 € | 45 € | 2,22 | 6,72 |
| April | 100 € | 55 € | 1,82 | 8,54 |
| Result | 400 € invested | Avg. price: 47,50 € | — | Avg. cost: 46,84 € |
By investing a fixed euro amount monthly rather than fixed units, you automatically buy more when prices are lower — reducing your average cost per unit compared to the average market price.
A lump sum theoretically outperforms DCA in a rising market — but it requires you to time the market and accept a large initial risk. For most people who are investing out of their monthly income anyway, the savings plan is simply the practical format. The psychological benefit — investing automatically without watching daily prices — also reduces the risk of panic-selling during downturns.
The power of compound interest — see it for yourself
The most important force in long-term investing is not the amount you invest — it is the time you leave it invested. Small, consistent contributions compound dramatically over 20 to 30 years. Use the calculator below to see what your monthly savings plan might grow to.
Historical approximation. ETF returns are variable and not guaranteed. Past performance does not predict future results.
Which ETF should you choose?
For most newcomers to investing in Germany, a single broad-market ETF is the right starting point. The question is not which stock to pick or which sector will outperform — it is simply which index to track. Two ETFs cover the needs of the overwhelming majority of long-term investors.
The VWCE covers approximately 90–95 % of the world's investable stock market capitalisation — around 4.200 companies from both developed and emerging markets. The US accounts for roughly 63 %, followed by Europe, Japan, and emerging markets including India and China. With one ETF, you own a slice of essentially the entire global stock market. VWCE is the most popular ETF in German savings plans and the largest physically-replicating global ETF in Europe.
Trade Republic, Scalable Capital, ING, DKB, Comdirect, Consorsbank, Smartbroker+
IWDA covers approximately 1.500 large- and mid-cap companies from 23 developed markets — the US (~71 %), Japan (~6 %), UK (~4 %), France, Germany, and other developed economies. No emerging markets. Slightly cheaper TER than VWCE, with slightly lower complexity. iShares (BlackRock) is the world's largest ETF provider. Historically, IWDA has had slightly positive tracking difference — meaning the fund has marginally outperformed its index net of fees.
Trade Republic, Scalable Capital, ING, DKB, Comdirect, and most German brokers
VWCE vs. IWDA — which to choose?
| Factor | VWCE | IWDA / EUNL |
|---|---|---|
| Emerging markets | Included (~10 %) | Not included |
| Number of holdings | ~4.200 | ~1.500 |
| TER (annual cost) | 0,19 % p. a. | 0,20 % p. a. |
| German tax treatment | Identical | Identical |
| Rebalancing needed | None — one ETF covers all | Optional EM addition |
| Best for | True one-ETF portfolio | Developed markets focus |
For most beginners, the choice between VWCE and IWDA is less important than starting at all. Both are excellent long-term investments. The standard German finance community recommendation is: pick one and stick with it. Do not switch based on short-term performance.
Xtrackers MSCI World Swap UCITS ETF 1C (DBXW) — synthetic replication, TER 0,15 % p. a., the cheapest MSCI World option. Amundi Prime All Country World UCITS ETF (PRIW) — TER 0,07 % p. a., one of the cheapest global equity ETFs available in Germany. Both are available as savings plans at Trade Republic and Scalable Capital.
Which broker to use — comparison for expats
Germany has several strong brokers for ETF savings plans. The four most relevant for expats in Germany in 2026 are Trade Republic, Scalable Capital, ING DirectDepot, and DKB Depot. All are BaFin-regulated. The key differences are price model, ETF selection, platform language, and tax handling.
- ETF savings plans free from €1/month
- 2.400+ ETFs, 9.000+ stocks
- 2 % cash interest, Visa Debit with 1 % Saveback
- Automatic Vorabpauschale and Freistellungsauftrag
- Full English-language app
- BaFin full banking licence
- Mobile-only (no web desktop platform)
- Customer support in-app only, can be slow
- No Girocard (pair with C24)
- 2.700+ ETFs as free savings plans (Prime tier)
- Full web desktop platform
- Savings plans: weekly to annually, 9 execution days
- Automatic Vorabpauschale handling
- 2,50 % cash interest (no time limit)
- Free tier: ~650 ETFs as free plans only
- Prime+: €4,99/month subscription
- Primarily German-language
- Free savings plans on most popular ETFs
- Integrated with ING Girokonto and Tagesgeld
- Web + mobile platform
- German tax handling automatic
- Manual trades: €4,90 + 0,25 % (min. €9,90)
- Smaller free ETF savings plan selection than neobrokers
| Feature | Trade Republic | Scalable Free | Scalable Prime+ | ING |
|---|---|---|---|---|
| Monthly subscription | €0 | €0 | €4,99/month | €0 |
| Savings plan fee | €0 (all) | €0 (selected ETFs) | €0 (all) | €0 (selected ETFs) |
| Manual trade fee | €1 flat | €0,99 + 0,01 % | €0 (unlimited) | €4,90 + 0,25 % |
| Free plan ETF selection | 2.400+ | ~650 | 2.700+ | Selected ETFs |
| Min. savings plan | €1 | €1 | €1 | €1 |
| Web platform | No (mobile only) | Yes | Yes | Yes |
| English language | Full | Partial | Partial | Limited |
| Auto Vorabpauschale | Yes | Yes | Yes | Yes |
| Cash interest | 2,00 % (unlimited) | 2,50 % (limited) | 2,50 % (limited) | 1,50 % (ongoing) |
As of June 2026. Verify current conditions with each provider before opening an account.
How to start your first savings plan — step by step
From zero to first automatic ETF purchase in under 15 minutes. Here is the exact process for Trade Republic — the recommended starting point for most expats in Germany.
Download the Trade Republic app, enter your personal details, and complete VideoIdent identity verification. You need a valid passport or ID, a German address (Anmeldung), and a German mobile number. The process typically takes under 10 minutes. Account access is usually granted within a few minutes of approval.
Open Trade RepublicIn the app, go to Settings → Tax → Freistellungsauftrag. Enter your Steueridentifikationsnummer and allocate up to €1.000 of your annual tax-free allowance to Trade Republic. If you have accounts at multiple brokers, split the €1.000 across them. Without this, Trade Republic deducts 26,375 % tax on every euro of investment income from day one — even if you are below the annual threshold.
Send a SEPA transfer from your Girokonto (C24, DKB, or any German bank) to your Trade Republic IBAN. Transfers typically arrive within 1–2 business days. Start with enough to cover 1–2 months of savings plan executions. You do not need a large lump sum — even €100 is enough to start.
Search for "VWCE" or "IWDA" in the app. On the ETF detail page, tap "Savings plan". Set your monthly amount — start with whatever you can comfortably save, e.g. €50 or €100. Choose monthly execution. Pick an execution date that aligns with your salary payment (e.g. the 5th of each month). Confirm.
In January each year, Trade Republic automatically deducts the Vorabpauschale advance tax from your cash balance. Keep €50–70 per €10.000 of ETF holdings available in your Trade Republic cash account each January. This amount is credited against your final capital gains tax when you eventually sell.
Set the savings plan and do not touch it. The most common investor mistake is pausing or cancelling during market downturns — which is exactly when you are buying at lower prices and when continuing matters most. Automate, set a reminder to review annually, and otherwise leave it alone. Time in the market beats timing the market.
Taxes on ETF savings plans in Germany
Germany taxes ETF investment income at a flat 26,375 % (25 % Abgeltungsteuer + 5,5 % Soli). German brokers handle all of this automatically, which is why using a BaFin-regulated German broker is strongly recommended for expats over foreign platforms like eToro, Trading 212, or DEGIRO — with foreign brokers, you must calculate and declare the Vorabpauschale yourself in your annual tax return, which is a significant extra burden.
You are entitled to €1.000 of investment income (interest, dividends, capital gains) tax-free each year — €2.000 for married couples filing jointly. Submit a Freistellungsauftrag to every German broker you use, splitting the €1.000 across accounts. Submit it on day one. For many investors saving €100/month, this covers several years of Vorabpauschale before any real tax is due.
Every January, your broker deducts the Vorabpauschale on accumulating ETFs. This is an advance tax on unrealised gains, calculated as: Portfolio value × Basiszins × 0,7 × 30 % partial exemption × 26,375 % tax rate. For 2026 (Basiszins 3,20 %), this works out to approximately €59 per €10.000 of ETF holdings if your Freistellungsauftrag is already exhausted. The amount is not an additional permanent tax cost — it is credited against your capital gains tax when you eventually sell.
When you sell ETF units at a profit, the broker deducts 26,375 % on the realised gain (minus all previously paid Vorabpauschale). For equity ETFs (Aktien-ETFs), a 30 % partial exemption (Teilfreistellung) applies — meaning only 70 % of the gain is taxable. Trade Republic calculates and handles this automatically. There is no holding period after which ETF gains become tax-free in Germany (unlike crypto held over 1 year).
Foreign brokers like DEGIRO, eToro, or Trading 212 do not handle the Vorabpauschale automatically. As a German tax resident, you are legally required to declare it yourself via Anlage KAP in your Steuererklärung. "Not knowing" is not a defence — the Finanzamt can and does pursue undeclared Vorabpauschale. For a long-term ETF savings plan, use a German broker and let them handle the paperwork.
Frequently asked questions
An ETF savings plan is the simplest path to long-term wealth building available to expats in Germany. The infrastructure is excellent: free execution, automatic tax handling, fractional shares from €1, and BaFin-regulated brokers. The main risk is not the product — it is behavioural. People cancel during downturns, start with amounts they cannot sustain, or spend years choosing the perfect ETF instead of actually starting.
The practical recommendation: open Trade Republic (best English experience, one-stop banking and investing), set up a Freistellungsauftrag immediately, start a monthly savings plan into VWCE or IWDA at whatever amount you can sustain without thinking about it, and review once a year. Keep a separate emergency fund in Tagesgeld — never touch the ETF savings plan for short-term needs.