Professional Documents
Culture Documents
Investing in Germany 101
Investing in Germany 101
Beginners
By Bharat Chaudhary
Entrepreneur
CONTENTS
T A B LE O F
1 Investment Timeline - My Investment Journey
Starting
Came to Germany for
Studies
No Job
No Savings
Age - 21
Start of Studies
Bharat Chaudhary Started with Masters
at TUHH
Started working as a
working student at
M.Sc Internationales Alina started full-
Wirtschaftsingenieurwesen time employment
Technische Universität
Age - 22
Hamburg
Major Update
Investment in
Business coach
Bought a house
Launched the Course
Saved Money for
investing in stocks
Age - 24
Investment
Started investing in
stocks
Age - 25
LESSON 1
POPULAR OPINION
hard.
their old age when their kids are unable to look after
grandparents.
LESSON 1
POPULAR OPINION
Coming to Germany
Once upon a time, there were two friends, Sam and
Tim, who came to Germany in 2020 for their masters.
blocked account.
University.
Saving vs Investing
Sam told tim that since university he had been saving
investment journey.
LESSON 2
DIFFERENT SAVINGS OPTIONS IN
GERMANY
You are reading this e-book because you are interested in profitable
investment options. Therefore I assume that you come here with the mindset of
saving money so that I dont have to explain exactly why and how important
saving is.
I will straight away get to the possible saving options that exist for you in
Germany:
Tagesgeldkonto
Festgeldkonto
Depots
Let's start with the list and I will tell you some details about all of these options.
LESSON 2
DIFFERENT SAVINGS OPTIONS IN
GERMANY
Girokonto
A Girokonto is your current account with a german bank in which you receive
your blocked account money (as a student), your salary or any other income
that you might have. This is also the account through which you do your day to
day transactions. In some countries, banks give interest on the amount in your
account on a yearly basis. But do you know how much you get in Germany?
Well, to be honest, it's not much. The interest rates are within the range of 0.01
- 1.00 %, which isn't much if you take into consideration the inflation rate, which
So even if you are saving more money every month, your money is ultimately
Sparkonto
In theory, a Sparkonto has a higher interest rate than a Girokonto. There is no
overdraft facility available for a Sparkonto and the sole purpose of such an
Tagesgeldkonto
Many Expats and students living in Germany usually dont know about the
fixed term. What this means is that you earn interest on the money you deposit
not fixed. The interest rate varies as per market trends and is calculated on a
any time without a fixed wait period. In Germany however, some of the most
famous banks like Sparkasse and Commerzbank offer 0.00% interest per
Festgeldkonto
Festgeldkonto is another banking service in Germany that most ex-pats and
which means that it cannot be withdrawn from the bank before the term of the
deposit is over. It has a fixed term of interest for a fixed duration of time. In
than tagesgeldkonto and sparkonto simply because the bank can work better
with the money deposited for a longer duration of time. But if you take into
consideration how much the interest rate really is, you lose more to inflation
than you gain by interest. The interest rate offered by banks like Sparkasse on
Depots
A depot is a depository account where financial instruments like ETFs, stocks
and funds are deposited. In Germany, the brokerage houses also provides the
other banking services provided with the bank and serves as a single access
point to maintain all the accounts without the need to make an advance
A depotkonto with a broker comes with low transaction costs and the only ''so-
Do you know the kids' song, ' If you are happy and you know it, clap your
hands'?
If yes, then we will do something similar right now, but I will change some
Ready?
If you've ever tried to save money and you've failed miserably if you've ever
commitments' is that people tell themselves that after taking out all of the
expenditure, the amount that is left will be their savings. Now if you've ever
tried to save money, you must have realized that as long as you can see that is
money in your wallet or account, you will come up with fancy ways of spending
it.
The thing that works best is not having the money at your disposal, to
begin with.
You must be thinking, what is this guy talking about?
Let me explain!
Follow this simple rule if you want to ' Actually' save money:-
Get a separate bank account and put aside your savings in that account.
LESSON 2
PRACTICAL WAYS OF SAVING MONEY
2. Automate the deduction process: What this means is that when you get
make sure that you put aside a specified sum of money in this separate
bank account. And the most important thing is to automate this. In most
banking banks you can automate this process so that in case even if you
forget doing this, the money gets automatically deducted and goes into
I use N26 Bank for this. Every month money gets deducted from my main
account into my N26 account automatically.
from the customer support, all of that can be done really easily in
be the reason why I love it the MOST! N26 makes it so simple and
you can just directly transfer the money in INR and the transfer is
matter which currency you want to transfer the money, you can
do it very quickly and without hefty fees like other German bank
accounts.
No Forex costs: If you are on the paid plan of N26, you get real-
time currency exchange rates and no surcharge whatsoever when
you are paying with your debit card or taking money out from
ATMs worldwide.
If you want to put cash inside your account, you can only do it free for 100
Conclusion
N26 is a great bank account to have at it is very convenient and it makes saving
Here is the Sign-Up link for the N26 account that you can use:
guy has practically lost it. Credit cards are ways to spend money and not save
Before we begin let me remind you that credit cards are the best if you
want to build up your SCHUFA Score.
A SCHUFA Score is your credit score and comes in handy when you want to
Payback card you save money while shopping for groceries in the form of
grocery stores and you accumulate points for every euro spent. You can
get the points transferred into your account in the form of actual money.
The good thing is that you dont pay anything for the card, there is even no
registration fee.
charges for having this card. Ba having some monthly transactions on your
credit card you can build your SCHUFA score slowly. Advanzia Gold
You can get your free American Express Payback card through
http://www.amex.de/freunde/bHARACjz4s
https://www.gebuhrenfrei.com/index.php/?
c2c=8W%2f8Z5a5GY1cXGmKkYTqybsPW35fAoyqavM8RTl8m
i0%3d
Step 2: Insert this code - 663NW3QDAASNDZUZ
Note: The Sign-up bonus changes from time to time. It can be anywhere between 25
to 40 euors. And to get the sign-up bonus you have to use the card once.
LESSON 3
THE REAL GAME CHANGER: WHAT MAKES
ALL THE DIFFERENCE
Saving money is not different for most people. I agree it is not as easy as
breathing (effortless) but maybe like drinking 8 glasses of water every day,
seems difficult at first but slowly becomes a habit. The real task is actually
figuring out what to do with the saved money and where to put it.
month 'under your mattress'' for 43 years (literally sleeping on money) you will
and getting compound interest of 7%, you will have roughly 552026 euros as
interest on your investment of 103200 euros. when you are 65. Not bad at all is
it?
But the real game-changer is not the compound interest rate but the age at
1. Sam starts investing 200 euros per month in ETFs at the age of 22 and
does so till the age of 65. His earnings will be 552,026 euros
2. Tim starts investing the same amount of money till the same age but starts
started investing at the age of 20 will have better returns than someone who
Some people do it as a hobby, some people are interested in it but you should
ideally do it because you want to make smart decisions with your money.
Saving money is good. Period. But not doing anything with the saved money
and having it sit idle in your bank account is the worst thing you can do to your
money. Because of inflation, your money is losing its value by the day.
Having money saved in a bank account would have made sense if banks in
Germany would have paid interest on the money, even if the interest was just
slightly above the inflation rate. But the truth is that banks in Germany do not
have profitable interest rates. And because of the negative interest rate, you
Another important consideration is that the pension fund that you are paying
into will not be enough to support you during your old age. According to an
article published by Deutsche Welle, the number of old people is rising every
year.
LESSON 5
THE GOLDEN RULES OF INVESTING
You might be wondering that if it is so simple then why isn't everyone doing it?
Well, to be honest, people are doing it and making smart decisions but there
are not that many people who think long term and follow the rules properly.
a short period of time then you might as well just go to Vegas and try your luck.
with the ultimate goal of minimizing risk. To start investing today, follow the
Scalable Capital recently because they have more and better buying
expats and students living in Germany can easily start their investment
now.
2. Open a Depot Account - The next step is to open a depot account. I got
mine opened with Scalable Capital in 2 days. You can choose your plan
together into one fund which is traded on a stock exchange. Scalable Capital
offers two different ETF plans. The first one is the MSCI World Index which has
more than 1500 companies from all over the world and the Vanguard S&P 500
UCITS ETF which has the major 500 companies from the USA.
6ae6-47b9-82be-e1fc565ededb
isin=IE00B3XXRP09&documentType=MR&country=DE&lang=en
4. Starting a savings plan - The next step would be to open a savings plan. With
the free broker option in Scalable Capital, you get one free Savings Plan. This is
25 euros.
Here I will show you how you can Savings Plan with Scalable
start your
Capital. If you select the Free Broker you get 1 Savings Plan for free.
Follow these steps:
Step 2: Fill in your email ID. Look at the picture for reference. You will get an
email confirmation on the email address that you provide. After confirming the
email address follow the steps by filling in all the necessary details.
(You can watch the video on my YouTube Channel in which I show how I opened
my depot with Scalable Capital and did the POSTIDENT Verification. Just click on
Step 4: Transfer Money in your Scalable Capital Broker Account (The minimum
that you have to transfer is 25 euros)
can choose Investors High Yield Low Volatility ETF. S&P500 Index or MSCI
World Index are both beginner-friendly ETFs to start with. Also, check the
yearly Total Expense Ratio
Step 7: Confirm and it will start investing monthly as long as you have sufficient
Note that the money gets automatically deducted from your account which is a
good thing because you dont have to manually remember to put it aside every
month.
END NOTE
When you are 65, do you want to retire with 103200
If you look at the MSCI World Index, you will notice that the returns have been