Investing in Germany – 2024 Guide

You’ve come to Germany and you have some money to spare, what should you do? Invest. 

Investing gives financial stability now and in the future. It allows you to increase your wealth while also generating returns that beat inflation. It develops a financial discipline by establishing a habit of putting away a specific amount each month or year for your investments. 

Furthermore, investments have the ability to help you achieve your financial objectives, such as paying off your college tuition, buying a car, acquiring a home, developing a retirement fund, and establishing an emergency fund. 

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Starting off with investing 

Obviously, you can invest by buying real estate or gold, since these require huge amounts of money and are not viable for many to start off by investing in these. one can start off by keeping their money in banks although it is 100% safe keep in mind that the interest rates in banks do not beat the inflation rate nowadays, again this isn’t an ideal method. Here are some other methods you can use to invest the extra money you have: 


Tagesgeldkonto offers much more flexibility. This account allows you to withdraw the money at any time. Daily transfers can be made from your money market account to the associated reference account, including the full amount invested. One euro is usually all that is needed to open a Tagesgeldkonto account. In this way, it is possible to invest small amounts of money with interest. This allows you to earn income right away. 

You are recommended to open an account if you do not know how long you can go without saving or if you want to save up to a certain amount with monthly amounts. Therefore, the money is not on a low-interest or interest-free checking account. 

Fixed Deposits (Festgeldkonto) 

Deposits with a fixed term are invested over a specific timeframe. Minimum and maximum terms for fixed-term deposits are one month and ten years, respectively. At this time, most banks do not have money available to investors. As a fixed-term deposit cannot usually be canceled early, you should carefully consider how long you can waive the investment.  

This form of investment offers a higher interest rate. Hence, fixed deposits offer a higher yield than Tagesgeldkonto. For longer terms, the interest rate will be higher. However, it is also possible that a fixed-term deposit offers little more interest than a call money account. Before opening an account, it is important to compare the current conditions of the two types of an investment carefully.  

Stock Market 

The typical approach is to conduct a considerable study, choose a reputable firm, and invest in its shares. 

The disadvantage is that investing in a single firm is too risky. You’ll need to invest in additional firms in different industries if you wish to diversify your risk. It means you’ll have to do a lot of research on each firm and spend time figuring out when the optimum moment is to purchase and sell. 

Furthermore, you must pay a transaction charge for each purchase and sell order. You’ll also need adequate money because certain stocks may cost over a thousand Euros, to begin with. Investing in multiple different equities requires at least a few thousand Euros in order to be sufficiently diversified.  

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Investment Funds 

One way to diversify your stock portfolio is to invest in investment funds. It means that a company will collect all of the money from investors and utilize it to buy stock. This can help save money on transaction costs because transaction fees are shared among all investors. 

A fund manager is in charge of supervising the fund and making investment decisions. Because of this, investment funds are also known as actively managed funds. A downside of investing in investment funds in Germany is the high provisioning and administrative costs for fund administration. 

The DAX, for example, is a stock index composed of 40 prominent German corporations that trade on the Frankfurt Stock Exchange. More than 1,600 firms from 23 developed nations are included in the MSCI World Index. 


ETF Funds 

An ETF fund collects money from all participants and invests it in equities that track a certain index. If you invest in a DAX ETF, for example, your money (together with that of other investors) will be invested in the 40 largest German firms at a proportion similar to the DAX index. 

You do not personally hold the shares of those 40 firms. Instead, you possess one DAX ETF “unit,” which is equivalent to a share in the ETF. Because the ETF comprises shares of the same firms as the DAX index, as the DAX index rises, so does the DAX ETF. It indicates that your DAX ETF “unit” is now worth more, and you may profitably sell it to another investor at a higher price. 

It’s important to remember that an ETF is a long-term investment. It aids in the long-term growth of your funds (at least 10 years). You can, for example, utilize it as a retirement investment. You can, however, purchase and sell your ETF at any moment. 

It’s also usual to invest in ETFs with a savings plan, which means you put aside a set amount of money each month. 

Real Estate Investments 

Although it is expensive and not applicable to most people, real estate is a fantastic investment. One of the best investments is to purchase a home and stop paying rent. Why would you want to make another person wealthy?  

Having your own property is a very good purchase. Since there is no need to worry about your rent being increased or being evicted. Here are some more compelling reasons to purchase a home in Germany: 

  • You may now receive a mortgage from a bank for as little as 1% to 2% interest. There is no better time to buy a home than now. 
  • In Germany is it tough to find a new property having the same cheap rent that you currently have especially if you have lived in the same place for a few years. 
  • You can customize your home without any limitations. You may personalize the furniture, get pets, add new doors and rooms, and so on. 
  • You won’t have to pay the 25% capital gain tax on your investment property if you sell it after ten years! 
  • Foreigners in Germany have no limitations on purchasing property (for personal use or investment). If you leave Germany, you may always rent out your property or sell it. 


Robo Advisor 

Automated, algorithmic investment services are provided by robot advisors using digital platforms with minimal human involvement. They provide easy account setup, goal planning, account management, and so on along with low fees. A Robo-advisor is often very inexpensive and requires very low opening balances, so nearly everyone can benefit from one if they so choose. They require you to complete a brief risk-profile questionnaire as well as an analysis of your financial situation, time horizon, and subjective investment goals. 
Robo-advisors main advantage is that they are less expensive than traditional advisors. The cost of online platforms is a fraction of that of human labor because they do not need labor. Robo-advisors are also more accessible. As long as the user has an Internet connection, they are available 24/7. 
For more complex issues such as estate planning, they are not the right option. Many have criticized robot advisors for their incompetence and lack of complexity.  


Companies have invested their capital in digital currencies in Germany, where cryptocurrencies are regularly traded and transferred. Bitcoin is estimated to be owned by more than 2.1 million people in Germany – 2.62 percent of the population. Currently, the German Bank Act (Kreditwesengesetz) regulates virtual currencies. The German Federal Financial Supervisory Authority (GFFSA) requires written authorization for any person who conducts banking business or offers financial services for commercial purposes in Germany. Bitcoin, in particular, is classified as a unit of account by the GFFSA in accordance with the German Banking Act. In other words, Bitcoin platform operators based in Germany/serving German customers are required by German law to obtain a license from the GFFSA. 

In Germany, 33% of cryptocurrency owners are between the ages of 18 and 34. There are 5 percent of them over 55, meaning that most of the Germans who own cryptocurrencies are young and tech-savvy.  Germany categorizes bitcoin as an economic asset (Wirtschaftsgut) taxable under the German Income Tax Act (Einkommenssteuergesetz). Therefore, Germany appears to be a fertile ground for cryptocurrency businesses because there are many successful crypto companies here. 

P2P lending 

P2P lending is a method of lending money directly to an individual or business without the involvement of an official financial institution. P2P lending generally takes place through online platforms that connect potential borrowers and lenders. Both secured and unsecured loans are available through peer-to-peer lending, however, mainly involves unsecured personal loans. As an investor, you can make money through P2P investing models, including peer-to-peer lending (also known as crowdlending or marketplace lending) and equity crowdfunding. 

Remember before investing in any options to thoroughly research about it as certain investments hold a certain amount of risk. If you’re careful enough and with enough time you can save up a lot of money that can help with your other expenses.  


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We want to be transparent with you. This article contains affiliate links, which means that when you click on them, we may receive a small bonus. Rest assured, this will not affect the price for you. Instead, it enables our dedicated Vanakkam Germany Team to continue delivering valuable content and improving our services. Your support is greatly appreciated as we strive to serve you better.

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