Fund savings plan
A fund savings plan is a savings contract with regular payments into an investment fund .
The savings fund as a regular investing a sum of money can also be done outside of a contractual commitment by an investor in a fund company or directly in some exchanges buys shares, often through the agency of a bank or an asset consultant. The fund unit certificates acquired are kept in a securities account.
Binding contract
If the investor enters into a contractual obligation to make regular payments to his contractual partner with a fund savings plan, the contractual partner in many cases grants him cost advantages over the contractually unbound fund savings.
Contractual stipulations
The payment interval is usually freely selectable in typical periods specified by the respective fund company (e.g. monthly, quarterly). By choosing the fund to be saved, fund savings plans can be tailored to individual savings goals in terms of security, availability, return and investment focus.
Fund savings plans are now available at almost all branch banks and direct banks . d. Usually possible from 50 € per month. The funds and their weighting in relation to the investment volume can generally be freely selected.
In the case of life cycle funds, the investor can benefit from the higher return of an equity fund in the earlier savings phase (which, however, is also associated with a higher price risk ). Towards the end of the term, however, the focus is on securing the capital saved with the help of fixed-income securities .
At the end of the savings phase, the investor can often freely dispose of his saved assets; an exception are Riester fund savings plans . He can have it paid off or z. B. agree a payment plan with a bank or investment company that leads to a fixed monthly pension.
costs
The investor may incur the following costs:
- Subscription fee of the fund, it is due pro rata for each installment,
- Administration and management fees for the fund, which are incurred continuously,
- Custody fees and
- possibly additional fees from the processing bank.
Direct banks and intermediaries who work with fund banks offer custody accounts with a discount of up to 100% on the initial charge.
Fund savings plans are also possible with so-called ETFs . In comparison, these usually have low running costs. Investors can thus achieve significant cost savings in the long term.
Income
The investor participates in the performance of the investment fund and in any distributions, in the case of equity funds z. B. the dividends .
With regular, long-term investments of constant amounts, the so-called average cost effect occurs , ie the fund savings plan differs less and less from a one-off investment of the entire amount. However, it does not have a positive influence on the development of the system.
Fund selection
Depending on the provider and savings plan, the investor has to decide on one or more funds in which to save. This requires a certain degree of competence, as the fund is expected to generate profits over a long period of time - but at least not to go bankrupt. This decision is highly complex, as there are now a practically unmanageable number of funds with a wide variety of investment goals, strategies and capital guarantees. Depending on the provider, it is also possible to shift assets from one fund to another later.
Some typical fund categories available for selection are:
Advantages and disadvantages
advantages
- The investor has complete control over which funds he invests in.
- The savings plan can be ended or paused at any time without incurring additional fees.
- Often banks and fund companies grant substantial discounts on the front-end load after a certain term of the fund savings plans.
- The return on equity investments is usually better than the return on other financial investments over long investment periods (but with a higher risk). Particularly when it comes to providing for old age , very long investment periods are to be considered, so that differences in returns have a significant impact on the level of attainable retirement income.
disadvantage
- In the case of funds, there is usually a price risk , ie the value of the investment can fluctuate. This risk can (partially) be eliminated with guarantee funds, but it also reduces possible profits.
- Independent selection of funds requires a certain level of competence.
- In the event of price losses in the meantime, many investors are tempted to terminate the savings plan prematurely at a loss if they fear that further losses are imminent.
- The investor must inform himself about changes to the fund (e.g. value, investment strategy, distributions, changes in management , etc.)
Tax treatment of fund savings plans
In Germany, the fund savings plan is not treated as a transaction for tax purposes, but each individual execution as an individual purchase. For acquired by end-2008 shares the previous tax law, for shares acquired as of January 1, 2009, therefore apply withholding tax .
Under previous law, the respective taxable parts of the distribution are subject to withholding tax (ZAST), special rules apply to retained income and the increase in value of the units was only taxable if the units were sold within the one-year speculation period. However, the ZAST is only an advance payment. The aforementioned income is subject to taxation at the personal tax rate, provided that the tax exemptions for income from capital assets are exceeded.
Since the savings plan consists of a series of individual purchases, it is necessary to make a consumption-based assumption in order to determine the (speculative) taxable profit . This has been set by law since 2006 with FIFO (previously the average method was prescribed). If, for example, shares were bought monthly from 2000 onwards and sold in 2007, the shares purchased at the beginning of the contract are initially considered sold (which are most likely already outside the speculation period). The speculation period now only plays a role for securities that were acquired before the end of 2008. At the beginning of 2009, the speculation period was abolished in Germany.
The taxable distributions of all units as well as the increase in value of the units acquired from 2009 are subject to the withholding tax from 2009. The taxation of capital gains makes fund savings plans significantly less attractive from a tax point of view.
A special feature arises in the case of contracts that were concluded before the withholding tax began and that are partly subject to old and partly new law. All individual purchases made before January 1, 2009 are subject to the old and later the new law. The FIFO method continues to apply. If, for example, shares were bought monthly from 2000 onwards and sold in 2010, the shares bought at the beginning of the contract are still considered sold. However, this is now detrimental for the investor, as he initially sells the units subject to the old law (for which future price gains are tax-free) and keeps the units acquired after 2009 (for which capital gains are taxed). It can therefore make sense to keep separate custody accounts for fund shares that were acquired under the old law and those that were acquired under the new law.
Comparable forms of investment
Insurance companies offer insurance products that work in a similar way. The advantage of these products, known as fund policies , is the delayed taxation of distributions, which means that the compound interest benefits the investor. The additional fees, which reduce the net return, are disadvantageous, especially if the investor wants to access his assets before the originally agreed expiry of the fund policy. On the website of Stiftung Warentest, you can use a calculator to estimate whether the tax advantage outweighs the costs incurred through fees.
Share savings plans are also offered, which are savings contracts with regular acquisition of shares in a company.
Individual evidence
- ^ Stiftung Warentest: Fund savings plans: Costs in comparison