The Securities Savings Plan Longevity That Pays Off

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How does a securities savings plan work?

Anyone who opts for a securities savings plan first needs a securities account. Why? Safekeeping of the securities in the safe of the bank (wrapping paper) has not been common for a long time. Instead, securities are now practically only “virtually” in the securities account. Once you have opened the securities account, you can now start your securities savings plan.

NOTE: Securities are subject to certain price fluctuations. It is up to you; deciding continuously for a certain number of securities at a fluctuating price within the framework of the securities savings plan or for a fluctuating number of securities for a fixed monthly, bimonthly or quarterly amount. A securities savings plan, in which a fixed number of shares is purchased per month, for example, is not recommended because of the price fluctuations.

The most common way to save in securities is to buy a fixed amount of fund or index fund units each month, depending on the stock market price. An interesting effect is the so-called average cost effect. The average cost effect arises when savers regularly invest constant amounts in securities as part of their savings plan. In long run, it leads to a low average purchase price.

The fluctuating stock exchange prices mean that you buy more shares in one month and fewer in the next. In phases of economic growth, equity investments often offer more returns than fixed-income investments.


The calculation is very simple: if an investor buys units cheaply and the prices rise in the long term, this leads to an above-average performance, which is ultimately reflected in the total return.

You can achieve a further boost in returns if you options for a fund for a fund savings plan that does not distribute the profits, but invests them again. This effect is nothing other than the compound interest effect in a savings book, in which the interest is not withdrawn, but is compounded again in the next year.


There are the following securities savings plan variants:

  • The private securities savings plan is not subject to any restrictions. You decide for yourself how long you want to save, whether you want to make special payments or sell shares during the savings phase. You are also free to choose your securities.
  • The VL savings plan in the form of a fund savings plan is very popular with savers, as they can accumulate a considerable amount with little effort. This becomes even more attractive if you meet the requirements for the employee savings allowance.


TIP: The securities savings plan is also suitable as a savings plan for children due to the long-term investment horizon. Because in the long term, stocks and investment funds can often generate significantly more returns than savings accounts, fixed-term deposits or building society contracts, which currently hardly generate any interest anyway.

Who is a securities savings plan suitable for?

In principle, a securities savings plan is worthwhile for everyone who wants to build up assets over the long term and is not afraid that stock exchange prices are volatile – that is, they are subject to fluctuations and can even slide into the red in phases of economic weakness.

If you remain flexible and don’t want to decide how long you want to save, then you are well equipped with a private savings plan. This also enables you to make arbitrary special payments or, if necessary, to sell securities in between when you need liquidity. Would you prefer to use state subsidies for a supplementary pension or do you receive subsidies for VL savings from your employer? Then you can fall back on the legally regulated variants.

BUT BE CAREFUL: Securities are subject to fluctuations. If any price losses occur in the meantime during periods of economic downturn, you as a securities saver must also expect losses if you terminate the savings plan and liquidate the credit. It therefore makes sense to plan a long term of at least 10 or 15 years, during which the saved capital is not needed.

How safe is my money with a securities savings plan?

A clear distinction must be made here between investing in mutual funds and ETFs on the one hand and investing in individual stocks on the other. The risk of investing in individual stocks is that a single stock corporation can go bankrupt. As a shareholder, the investor then loses all of his invested capital.

In the case of a fund or ETF, this would only happen if all the companies in the fund went bankrupt on the same day without notice – a very unlikely scenario. Should the fund company itself become insolvent, this would have no effect on the investor. Funds are special assets that are managed separately from the capital of the fund company and are thus protected.

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