How do I buy a fund regularly

How do I buy a fund regularly

The money ends up in a kind of basket, through which the fund company then invests it in various investment objects such as stocks, bonds, commodities such as gold or real estate.

The hope is that rising share prices, interest rates or prices will increase the sum of money – in the long term. Terms of 20 or 30 years are not uncommon.

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After this savings phase, usually when you no longer go to work, you can have your paid-in capital and any income paid out – as a one-off payment or monthly payments. Basically, the unit-linked pension insurance is a fund savings plan "in the coat" a pension insurance.

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Good to know: Unit-linked pension insurance contracts that meet certain requirements can also run as a Riester pension. In this case it is subsidized by the state. The Riester pension may be worthwhile for you – but often not.

What are the advantages of unit-linked pension insurance?

The main advantage of unit-linked pension insurance is obvious: You can benefit from rising prices for the investment property.

Because by investing your money in a fund for old age, you become a co-owner of stocks, real estate or commodities such as gold. When the price of a stock or a house goes up, you generate income called a return. This can sometimes be up to six percent.

Yield: what exactly is that?

But be careful: this yield is often not guaranteed. Because it depends largely on the success and value development of the investment property.

One advantage of unit-linked annuity insurance is that it is often very flexible. This means that you can increase or decrease your contribution payments. It is also sometimes possible that you can change the fund in which you invest your money – often free of charge.

How safe is such an insurance?

That depends on your fund policy. Basically, however, there is often no guarantee pension.

The insurers like to cite certain sample calculations in which they show a high so-called pension factor. This indicates how high your monthly pension will be per 10,000 euros.

How to calculate the monthly pension per 10,000 euros using the pension factor: (pension factor x capital saved) / 10,000 euros = monthly pension per 10,000 euros saved capital.

Pension calculation: You can calculate your monthly pension for every EUR 10,000 saved capital using the pension factor as follows: Pension factor x capital saved / EUR 10,000. For example, if you saved 100,000 euros and the pension factor is 30, your monthly pension would be 300 euros per 10,000 euros of capital saved.

But: The pension factor is often not guaranteed – and can accordingly decrease over the duration of your deposit if, for example, the price of the fund falls. You should therefore make sure that the pension factor is guaranteed – but at the same time high. At the same time, you shouldn’t ignore the costs (see below).

Basically, the longer you have unit-linked pension insurance, the better. Because then you sit out possible price falls (see below).

What are the costs of a unit-linked pension insurance?

When it comes to fees, you have to differentiate between two different types of costs. Because both the insurance company wants a fee from you – for offering and managing the insurance.

In addition, there are additional costs when taking out some pension insurance. You should therefore make sure that you take out so-called net policies. There are no closing costs for these.

The fund company also keeps part of your investment money – so that a manager manages the fund and buys the investment objects for you. This is why pension insurance based on a so-called ETF, also known as an index fund, is significantly cheaper.

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This means special equity funds in which a computer algorithm reproduces a stock index such as the Dax. You don’t have to pay a fund manager here.

You should question model calculations

Since many pension insurers often do not break down the costs transparently, you should try to calculate them yourself. The insurers often present you with a sample calculation – which consists of the assumed interest rate, the monthly premium, the payment period and a possible final amount.

Then you can calculate your actual income yourself with the help of an interest calculator on the Internet – and compare it with the one from the example calculation. The difference is the cost. You should definitely compare these with different providers.

Tip: Don’t be afraid to ask your insurance company about the calculated difference. Because a high price reduces the return in the long run.

One-off payment or monthly payments: How can I have my pension paid out?

You can usually choose between two possible payments: Either you can have the payments paid out as a monthly annuity – or as a lump sum. This is treated differently for tax purposes (see below).

But you should make sure that you secure the so-called capital option. Only in this case can you choose between the two payout options shortly before you retire. This is usually very flexible – up to three months before you retire.

What taxes do I have to pay?

During the entire saving phase, you pay no taxes, neither on the capital saved nor on the income. Your personal income tax rate only applies when you pay out – but only on the part that you have earned, i.e. the share of income.

And even this is not fully taxed. The proportion of the income on which taxes are incurred depends on the type of pension payment.

One-off payment: If you have paid in at least twelve years and do not have your pension paid out until you are 62, your personal income tax rate will only apply to half of the income. Monthly life annuity: Here, the portion of the income on which your income tax rate applies depends on the age at which you would like to have the fund pension paid out (see table).

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On the other hand, you do not pay any taxes on the savings portion. However, this only applies if you also pay contributions before the capital is paid out. 

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With a private pension insurance that you took out before 2005, you usually do not pay any tax on the income. If you cancel or sell your pension insurance beforehand, it depends on when you signed the contract:

Contracts before 2005: These are tax-free if canceled. Contracts from 2005: The same rules apply here as for taxing the one-off amount, i.e. 50 percent of the income is taxed at your income tax rate

You should, however, think carefully about whether you want to terminate your insurance contract. Because you may make losses with it (see below).

Can I also cancel my unit-linked pension insurance?

Yes you can. However, experts do not recommend that. The reason: You usually lose money as a result – especially if you want to terminate the contract within the first five years of signing it.

This is because you only get the so-called minimum surrender value back. The surrender value is the amount saved including possible income. However, the closing and administrative costs are of course deducted – and these are particularly important in the first few years. Taxes are also due on the surrender value – even withholding tax including solos if the contract has not yet run for twelve years (see above).

That is why experts advise simply making a pension insurance contract free of charge. Then you keep the insurance cover but do not have to pay any premiums.

You can also sell your pension insurance contract – to a so-called insurance buyer. Before doing this, however, you should find out what the surrender value is – in order to achieve a higher price.

For whom is unit-linked pension insurance suitable?

The unit-linked pension insurance is most likely to pay off for younger people. Because they can simply sit out price fluctuations (see above).

In any case, it is worthwhile to compare several insurance policies with one another in order to find the best mix of risk, costs and return. You should therefore also take a look at ETF-based pension insurance. These are usually much cheaper – while the return is similar to that of the unit-linked pension insurance.

Retirement insurance: These are the costs that you will have to pay for newcomers: Dax ETF – smart investment or high risk? ETF savings plan: How to invest a small amount in an index fund every month

You can also take out a fund or ETF savings plan directly. Then you save the cost of pension insurance. But note: These are not tax-privileged, but can still be worthwhile given the low costs.

Sources used: Own research FinanztipStiftung Warentesteinfach-rente.derente.comgansel-rechtsanwaelte.deversicherungenmitkopf.deVerbrauchzentraleaerzteblatt.definanzen.devolders.degevestor.dead more sources show less sources

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.


How do I buy a fund? What are the costs of buying a fund? How do I sell a fund? Can I also transfer a fund? How do I buy a fund on a regular basis?

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.

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Purchasing funds is just as easy as opening a savings book, a day or fixed-term account. t-online shows you how it works and what you should be aware of.

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.

Branch bank

The very 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 acquire the fund share.

The advisor then usually buys the fund share through the fund company that issues the fund. Usually the full so-called issue surcharge is due. This fee for launching the fund sometimes amounts to up to five percent of the investment amount and is therefore very expensive.

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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.

The following applies: The route via the bank advisor is uncomplicated, but also expensive. After all, banks let themselves be paid for the service they offer.

Direct bank

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:

Selecting a direct bank: First you should consider which direct bank you would like to use to buy a fund unit. Well-known banks include ING, Consorsbank, DKB or Comdirect. Open a deposit: 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.