Five years ago, I wanted to buy stocks in Germany. I was sitting at my desk, staring at my mobile screen. My heart was racing, my Finger hovered over the “Confirm Transfer” button. My Deutsche Bank and my investing apps were open. It was just €100 not a life-changing amount but at that moment, it felt like I was about to jump off a cliff.
I wiped my sweaty palms on my jeans, exhaled sharply, and tapped. Transfer Successful. For a second, nothing happened. The world didn’t explode. My bank account didn’t crash. But my stomach tightened. Okay… now what?
How to buy stocks in Germany
Why people do not invest in the Stock Market?
I know most of you are not making your first investment because you are having the same feelings I had five years ago. I know that its scary and thats why I have spent the last five years first educating myself and making content guiding others how to get over this fear.
That’s why in this guide, I’m breaking it all down for you:
- How to buy stocks in Germany
- Avoid beginner investing mistakes
- Make your money work for you
What is Investing and why you should start now
So Investing is basically putting your money into something. Whether that’s stocks real estate or crypto among many others. With the hope of getting more money back in the future.
Save your money from Inflation in Germany
The whole point of investing is basically to keep your money safe from inflation. On average the Euro loses about 2% of purchasing power every single year due to inflation. Just in 2024 the Euro lost about 2.2% of its value, in 2023 it was 5.9%.
So if you have 1000€ in january 2023, its value decreased to €944 in january 2024 and by january 2025 that 1000€ was worth €924.
I’m sure you’ve seen this in your own life. your money isn’t worth as much as it used to. For me a trip to Aldi or Lidl was less than 20€, but now its about 35€.
So the effect of inflation is real and you can see what inflation does to your money which is why you have to invest it so that your money keeps up with inflation and of course if you do it right it will also outpace inflation as well.
Why Investing in the Stock market in Germany better than a Savings Account
You might be thinking of moving your money from a current account to a savings account. Sure that can help, its definitely better than keeping it in a current account for sure.
For example Scalable Capital is offering 2.7% variable rate for upto 50 thousand euros with their free account . But the rate is trending downwards since the past few months. So just keeping all your money in a savings account doesnt make much sense.
Ahsan, isn’t investing really risky?”
That’s a fair question. And the truth is yes, investing does carry risk. But do you know what’s even riskier? Not investing at all.
Because when you don’t invest, you’re making a silent but guaranteed decision: to stay financially stuck while inflation quietly eats away at your savings. You continue trading hours for money, instead of letting your money work for you.
How investing in the Stock Market is better
Imagine two versions of yourself.
The first: you save diligently. Every month, you set aside €100 in a bank account, feeling safe and secure. Fast forward 30 years, and you’ve saved up €36,000. But thanks to inflation, the real value of your money has dropped, and your purchasing power is now just €23,755.
Now, let’s look at the second version of you. This version invests that same €100 every month into the S&P 500, a collection of the 500 largest companies in the U.S. Historically, it has returned an average of 7% per year, adjusted for inflation. After 30 years, instead of just €23,755, your investments would have grown to an impressive €113,000.
That’s the difference between barely keeping up and actually building wealth.
So yes, investing has risks. But the far greater risk is never starting at all.
If you’re new to investing and feeling intimidated, don’t be. Get excited because this is the key to earning more while working less. And who wouldn’t want that?
How to start investing in Germany?
Two of the biggest things that most expats in Germany think about when we talk about investing is Real Estate and Gold. Both of these are valid investments but with real estate you first need real capital and gold needs to be stored securely.
There is a third option as well, investing in the stock market. Where you can theoretically start with just 1€.
My Experience with buying stocks in Germany
To make you first investment in the stock market, you need to open an Investment acccount. Now there are many options to open an Investment account in Germany.
You can go to traditional banks and open an investment account with them, but a quicker and in most cases a cheaper option would be to pick an online only option.
My First Investment Account in Germany was with Trade Republic, but these days I prefer to use Scalable Capital. Both are great platforms but Scalable Capital accepts more nationalities.
Selecting an Investment account in Germany
The Registraton process is very simple but you need a valid residence permit in Germany as you would need to verify your identity.
Registering and verifying the account would take a couple of days but once you have a verified account now you can start investing. Remember
Simply transferring money from your checking account to this investing account doesn’t work. It just means that you have an investment account with money in it. At that point it’s basically like a low interest savings account until you actually buy stocks and ETFs with the money that is in the investment account.
Related Guide: Best investing Apps in Germany
How to buy stocks in Germany
Now you have to buy Investments which is the interesting part. I remember as soon as the money I sent from my checking account arrived in my investing account, I opened the app to invest in the stock market.
It was extremely overwhelming. The app showed so many options: Bonds, Regions, Investing Strategies, Industries and Trends. I was so confused as I am sure you might be as well.
However when you’re deciding where to invest your first 100€ in Germany, it comes down to basically two options. You can either invest in stocks or you can invest in ETFs.
Don’t worry I’m going to explain both one by one.
What are Stocks and ETFs
You’ve probably heard of stocks before those little pieces of paper that hold a claim to a company’s profits. But what exactly are stocks, and how do they work?
When you buy a stock, you’re buying a small slice of that company. Its quite exciting Because, as the company grows and makes money, you get a piece of the pie! Whether it’s in the form of stock value growth or dividends, that stock represents your share in the company’s success.
Let’s say you love Microsoft. When you purchase Microsoft stock, you’re not just buying shares; you’re becoming a tiny owner of the tech giant.
Now, you might be wondering, “How can I start investing in stocks?” There are a couple of ways to jump into the market.
Option 1: You can buy individual stocks. This means you pick companies you believe in like Microsoft and buy stock directly from them. You’re investing in that company alone. But there’s another way…
Option 2: You can invest in Funds or ETFs (Exchange-Traded Funds). Think of a fund like a basket of many different stocks. It’s like purchasing a bundle of companies, all in one go. The benefit of this method? Instant diversification. Instead of putting all your money into one stock, you get a tiny piece of many companies. If one company underperforms, your risk is lower because your other investments can balance it out.
Diversification with Buying Stocks in Germany
This is the magic of diversification. By investing in a lot of companies, you protect yourself from putting all your financial eggs in one basket. If one company crashes, your portfolio isn’t wiped out. Instead, it’s supported by other companies doing well.
So, now that you know about stocks, what’s the next step? How do you choose where to invest? There are plenty of funds out there, and you have many options.
Selecting ETFs in Scalable Capital
Take a look at platforms like Scalable Capital, which offer a variety of funds and ETFs. The key here is to look for low-fee funds. Each fund or ETF charges a management fee for the service of managing all those stocks. It’s typically a small fee, but every little bit counts.
This fee is known as the expense ratio. For example, the expense ratio could be anywhere from 0.05% to 3% and it makes a big difference. Anything under 0.5% is good, but I recommend avoiding funds with an expense ratio higher than 1%. A low expense ratio means more money stays in your pocket.
Index Funds, like the S&P 500 ETF, are often the best option. These funds track the performance of an index like the top 500 companies in the U.S. They’re inexpensive and widely available. But beware of actively managed funds, where a professional manager picks the stocks. These often come with higher fees and lower returns than their passive counterparts.
Now, let me show you why low fees matter. Let’s say you’re investing €100 a month. If the fund you choose has a 1% expense ratio, after 30 years, you could have about €95,000. However, if you choose a fund with a low expense ratio of just 0.07%, you’ll end up with €112,000. That’s a difference of €17,000, just because of the fees!
When you’re investing for the long term, those little fees add up. The lower the fees, the more of your money works for you.
When is the best time to buy stocks in Germany?
Now, you might be thinking: “When is the best time to invest?” Is it today? Or should I wait for a dip in the market?
Let me tell you one thing, timing the market is nearly impossible. In fact, it can cost you a lot of money in the long run.
Timing vs Time in the Market
Let’s say you invested €10,000 in the S&P 500 in January 2003. Fast forward 20 years, and your investment would have grown to €65,000. But what if you tried to time the market and missed just 10 of the best days over those 20 years?
Your investment would only be worth €30,000 half the value! And if you missed 60 of the best days? Your portfolio would only be worth €4,200.
The moral of the story: the best time to invest is now. As the saying goes, “The best time to plant a tree was 20 years ago; the second best time is today.” Investing consistently, no matter the market conditions, is the key to building wealth over time.
How I would buy stocks in Germany today
Ok lets make things more practical, let me share exactly how to buy stocks in Germany.
As I mentioned earlier, you need an investment account for that. My Favorite is Scalable Capital, you can use this first link to signup at no additional costs to you.
Once you signup and verify your identity, go to the find section. Here you can search for any Index Funds or ETFs, my Favorite is S&P500 so I am going to search for that.
Best ETFs in Germany
Then here I have many options to choose from. I have ETFs from Ishare, Amundi and Xtrackers. Even within these providers I have Acc and Dist.
Acc means Accumulating which auto reinvests dividents and Dist which means Distributing and it distributes Dividends. Once I select one of these ETFs, I can see the details like the Costs.
For this ETF the TER is 0.07% which is amazing. Here I am going to select a Savings Plan which lets me auto buy at a regular interval. Add my desired amount of investment, in our case Ill be adding 1€, select continue.
After that I can select the buying frequency, which is monthly, Every 2 months , Quarterly, Every 6 months or Annually. Ill select monthly. I can also choose the Day of execution. There are 9 days but I usually select the soonest.
In the payment option I select my reference bank, this way my Scalable Capital Investment app automatically gets fund from my bank account and buy the ETF for me without me having to manually transfer funds each time. This not only saves time but also makes the whole process completely handsfree. And thats it, I have invested my first 1€.
If you are looking for a Sharia Compliant version, you can search of Islamic USA and follow the same process to invest in a Sharia Compliant ETF.
Disclaimer: None of the content in this article is meant to be considered as legal, tax or investment advice, as I am not a financial expert or a lawyer and am only sharing my experience with stock investing. The information is based on my own research and is only accurate at the time of posting this article but may not be accurate at the time you are reading it.