From Sparbuch to Sparplan with 100 € a month
Why saving alone loses money, how ETFs work, how they're taxed here and back home, and how to start in one evening.
Money in a current account quietly shrinks
Prices in Germany rose 2.9% in the year to August 2026. Most savings accounts pay less than that, so the same euros buy less every year.
One purchase, about 1,300 companies
An ETF is a fund that holds a whole index and trades like a single share. An MSCI World ETF spreads 100 € across large companies in 23 developed countries.
Accumulating or distributing?
Accumulating (Acc) funds reinvest dividends for you. Distributing (Dist) funds pay them out. For building wealth over decades, Acc keeps every euro compounding: after 25 years at 7%, the difference on 100 € a month is about 15,550 €.
Choosing a fund
Pick the index first (MSCI World, FTSE All-World or MSCI ACWI), then a fund with a yearly cost (TER) under 0.3%, over 500 million € in size, Irish domicile for US-heavy indices and a free savings plan at your broker.
Costs add up
A bank fund with 1.8% a year plus a 5% front load leaves Lena with 57,497 € after 25 years. A 0.2% world ETF, same market, same deposits: 76,444 €. Compare costs in euros, not percent.
About 18.5% on equity ETF profits, after a 1,000 € allowance
With a German broker and a Freistellungsauftrag, tax is handled automatically. These are the building blocks for 2026.
| Rule | 2026 figure | What it means for you |
|---|---|---|
| Abgeltungsteuer + Soli | 26.375% | Flat rate on investment income, whatever your salary. Church tax extra if you're a member. |
| Sparerpauschbetrag | 1,000 € / 2,000 € | Yearly tax-free investment income per person / married couple. Set it with a Freistellungsauftrag. |
| Teilfreistellung | 30% | Share of an equity ETF's profit that is tax-free, so the effective rate is about 18.5%. |
| Vorabpauschale | Basiszins 3.20% | A small yearly prepayment on accumulating funds, collected in January and credited when you sell. |
| Grundfreibetrag | 12,348 € | Below this total income, apply for an NV certificate and pay no tax on ETF gains. |
Example: Lena sells with a 2,000 € profit. 30% is tax-free, the allowance covers 1,000 €, and she pays 105.50 € in tax, about 5% of the profit.
Same ETF idea, very different tax bills
Once Germany is your tax home, it taxes your worldwide investment income. Double tax agreements stop you paying twice.
Investments from home
Funds at a foreign broker must be declared each year in Anlage KAP and KAP-INV. Many expats keep old holdings abroad and do all new investing through a German broker, where tax is automatic.
US citizens and green-card holders
European UCITS ETFs count as PFICs under US law. Use a broker that accepts US persons, stay with US-domiciled funds and get a cross-border tax adviser.
Moving back, for example to India
Check whether your broker lets you keep the depot. Returning Indians usually get RNOR status for about 2–3 years, when overseas gains are generally not taxed in India. Plan any sales around it.
| Country (resident) | Tax on a long-term ETF profit | Good to know |
|---|---|---|
| Germany | ~18.5% | After the 1,000 € allowance |
| France | 31.4% (PEA: 18.6%) | PEA after 5 years |
| Netherlands | Deemed 6% return taxed at 36% | Above 59,357 € of assets |
| USA | 0 / 15 / 20% | By taxable income, held over 1 year |
| India | 12.5% | Indian equity ETFs, above ₹1.25 lakh a year |
| Switzerland | 0% | Dividends taxed as income; wealth tax by canton |
From zero to a running savings plan in one evening
- 0–10 minGather your documents
Passport or ID (plus residence permit if you're from outside the EU), your 11-digit Steuer-ID, a German IBAN and your phone.
- 10–25 minChoose a broker
Compare online brokers on independent sites such as Finanztip or Stiftung Warentest. Look for free ETF savings plans, no custody fee and an English app.
- 25–40 minOpen the depot and verify your identity
VideoIdent, PostIdent or your ID card's online function. You'll be asked about tax residency, US-person status and church membership.
- 40–45 minSet your Freistellungsauftrag
Enter 1,000 € (2,000 € for a married couple) so no tax is deducted up to your allowance.
- 45–55 minPick your ETF
Use the fund checks above and note the 12-character ISIN.
- 55–60 minCreate the savings plan
Choose the amount and a date two days after payday. Then close the app and let time work.
What could your monthly plan become?
Move the sliders. The example starts with Lena's plan: 100 € a month for 25 years at 7%.
Historical MSCI World returns in euros were roughly 7–8% a year since 1970. Averages, not promises.
Monthly compounding, deposits at the start of each month, costs included in the return. Tax estimate: 30% partial exemption, 1,000 € allowance, 26.375%, no church tax.
The German words you'll meet
In your broker app, bank letters and tax forms.
- Sparplan
- Automatic monthly savings plan
- Depot
- Securities account
- Tagesgeld
- Instant-access savings account
- Freistellungsauftrag
- Exemption order for your 1,000 € allowance
- Thesaurierend / ausschüttend
- Accumulating / distributing
- Vorabpauschale
- Yearly advance tax on accumulating funds
- Teilfreistellung
- Partial tax exemption for funds
- Ausgabeaufschlag
- Front load charged on each purchase
- Jahressteuerbescheinigung
- Annual tax certificate from your broker
- Altersvorsorgedepot
- State-supported pension depot, from 2027
Every source the ebook relies on
Official figures first, then comparison tools and country guides.
Official German sources
Compare and learn
Pension grants 2027
The friendly ETF guide in English for everyone living in Germany
17 short chapters that follow Lena and five other characters: a late starter, a freelancer, a Blue Card holder, a young family and a grandmother who loves her Sparbuch.
- German and expat taxes explained line by line
- Country tax cards for Switzerland, France, the Netherlands, the USA and India
- A German–English glossary and a free yearly update of the numbers