Why you should invest in Germany

In today’s financial landscape, inflation erodes your money’s value if it stays idle, and savings accounts often don’t keep up. With Germany’s strained pension system and high taxes reducing disposable income, personal investments are essential for securing a comfortable retirement and achieving financial independence.

Start investing now because time is on your side. Investing not only helps protect your assets and seize market opportunities but also boosts long-term wealth through compound growth.

Scalable Capital
€0

  • German Broker
  • Free Savings Plan
  • Free Tax Handling
  • Interest on uninvested cash
  • Pricing Model for Orders
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Trade Republic
€0

  • German Broker
  • Free Savings Plan
  • Free Tax Handling
  • Interest on cash + Banking features
  • 1€ Flat order fee
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Trading 212
€0

  • Practice Mode
  • Free Savings Plan
  • No Order fee
  • Interest on uninvested cash
  • No Tax Handling
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Install

Where to Invest?

With the Securities account, you can start investing in following assets:

  • Stocks: It means owning part of a company. A share is the smallest unit of ownership. Think of a company as a pizza, and your share is a slice of that pizza.
  • ETFs: ETFs track indexes or sectors, diversifying investments across stocks, bonds, or other assets with lower fees than actively managed funds, appealing to both new and experienced investors.
  • Bonds: Bonds are loans that investors provide to companies or countries to fund large projects. In return, investors receive regular interest payments along with repayment of the loan amount.
  • Cryptos: Cryptocurrencies are digital assets using blockchain for secure transactions without banks. They function like traditional currencies but globally, for purchases, investments, and transfers.
Risks

Let’s Talk Risks

For sure, investing involves risk, and higher risks can potentially lead to higher returns. However, it’s important to invest in a way that aligns with your comfort level and financial goals. If you prefer stability and peace of mind over higher gains, consider lower-risk investment options that offer more security and fewer worries about losing savings. Your investments should enhance your financial independence without causing undue stress in your life.

What about Taxes?

Earnings from savings accounts are subject to a 25% capital gains tax (Kapitalertragsteuer), plus a 5.5% solidarity surcharge and a church tax (approximately 8% to 9%) for church members but you can request a tax exemption (Freistellungsauftrag) from your German account broker to avoid taxes on gains up to 1,000 euros (or 2,000 euros for Couples) annually. Without an exemption, taxes are deducted automatically by your bank or broker from your gains. Understanding these options ensures you manage taxes efficiently on your savings.

 

Frequently Asked Questions

The simple answer is yes, you can! However, there are limitations for US citizens.

Before investing while living in Germany as a foreigner, think about your current situation and future plans. This will guide you in choosing the right investment options that suit your needs.

When selecting a broker, ensure it meets your specific needs. Can you trade everything you desire? Some brokers offer a broad selection of ETFs, while others provide lower fees and cater better to individual stocks. Finding the right balance is crucial.

Beyond costs, also consider if the broker offers savings plans in Germany. These plans simplify regular saving with minimal time and effort for tax filing, serving as a powerful tool for steady wealth accumulation.

All German registered brokers regulated by BaFin are considered to be secured.