Capital-forming benefits: how to invest your savings wisely

Capital-forming benefits (VL) are often offered by employers as financial support for their employees to help them build up assets. But how do you best invest your savings to get the most out of your VL??

One possible option is to invest in equity funds. You can choose between different investment strategies, depending on the risk profile that suits you best. Another option is to invest in building savings contracts. These offer you low interest rates, but a high level of security.

It is important that you inform yourself in detail and compare different offers before concluding a corresponding contract. Also, the tax aspects should be considered to really get the most out of your VL. A tax expert can be helpful here.


Investing capital-forming benefits wisely can be a significant benefit to your wealth in the long run. Thorough research and expert advice can help you find the best option for your individual situation.

Capital-forming benefits: How to invest them properly

Wealth-creating benefits, also known as VL, are a form of government assistance to help workers build their assets. The employer pays a certain amount into a savings plan, which can be paid out later. These benefits are a good way to build up assets and can be paid in both a lump sum and in installments.

It is important that capital-forming payments are invested correctly in order to derive the maximum benefit from them. One possible investment option is funds that invest in shares, bonds or real estate. Attention should be paid to the investor’s willingness to take risks. A traditional investment such as a savings book can also be an option, but is less profitable due to the current low interest rates.

When choosing a savings plan, pay attention to the flexible options available. It is advisable to choose a plan that allows the savings amount to be adjusted or the money to be paid out early. It also makes sense to automatically increase the savings amount in the event of salary increases in order to build up assets more quickly.

  • Capital-forming benefits are a government support to build up assets.
  • A good investment option is funds or flexible savings plans.
  • Pay attention to a flexible adjustment of the savings amount and the payout modalities.

It is advisable to invest in capital-forming benefits at a young age in order to build up assets over the long term. It can be useful to regularly review the investment strategy in order to make adjustments if necessary.

Anyone wishing to take advantage of capital-forming benefits should obtain detailed information and compare various offers. This is how the optimal savings plan can be selected to build up assets sustainably.

Who is entitled to capital formation benefits?

Capital-forming benefits are an attractive way to save capital. But not everyone is entitled to VL. Anyone interested in this form of savings should therefore take a look at the requirements.

First of all, employees are entitled to VL, provided that they are agreed in the collective agreement or in the employment contract. Civil servants and soldiers can also receive capital-forming benefits. The same conditions apply to trainees as to employees.

Capital-forming benefits: how to invest your savings wisely

Low-income earners also have the option of benefiting from VL. There are government subsidies, for example through the employee savings allowance or the housing subsidy. The prerequisite for this, however, is an income below a certain limit.

Irrespective of income, certain occupational groups such as journalists or artists are also entitled to capital-forming benefits. It is therefore worth checking in advance whether you are entitled to VL and which subsidies you qualify for.

  • Conclusion: Anyone who wants to use capital-forming benefits should find out in advance whether he or she is entitled to do so. Whether you are an employee, a civil servant or a low-income earner, there are several reasons to be eligible for VL. A close examination is worthwhile in any case, in order not to miss promotions.

The importance of bank savings plans for capital-forming benefits

Capital-forming benefits are a popular type of investment in Germany. Part of the salary is invested in investment products and supported by the employer. A bank savings plan is a frequently chosen option for investing capital-forming benefits. The money is deposited securely in a savings account and is increased with interest.

The advantages of a bank savings plan are primarily security and flexibility. The risk of losing the money is very low, as savings accounts are protected by the deposit insurance scheme. In addition, it is possible to dispose of the saved money at any time or to increase or decrease the amount.

However, the return on bank savings plans is usually lower than on riskier forms of investment. It is therefore advisable to use other investment products such as equity funds or ETFs in addition to a bank savings plan in order to diversify the portfolio.

  • Tip: Find out exactly about the conditions of your employer’s bank savings plan and compare them with other investment products in order to create an optimal strategy for capital-forming benefits.

Unit-linked savings plans for capital-forming benefits

Among the capital-forming benefits, there are various forms of savings that are suitable on a fund basis. Fund-linked savings plans offer investors the opportunity to invest in selected investment funds and thus increase their assets over the long term.

There are different types of funds that can be selected depending on risk tolerance and investment objective. For example, there are equity funds, bond funds or mixed funds. Funds specialized by region or industry are also possible.

One advantage of unit-linked savings plans is the ability to build up assets over the long term by making regular deposits. Investment in funds offers a higher chance of return than traditional forms of savings such as savings books or fixed-term deposits.

  • Tip: Before concluding a contract, however, it is important to check carefully what costs the investor will incur. Here, not only the management fees of the funds, but also the acquisition costs and any custody account fees of the provider must be taken into account.
  • Reading tip: Learn more about different types of investment funds and their investment strategies in our guidebook.

It is also important to consider the term and termination options of the savings plan. Early termination can be associated with high losses.

Tax aspects should also be taken into account. Gains from unit-linked savings plans are generally taxable. However, there are differences depending on the investment period and amount.

Aspects of investing capital-forming benefits

Those who receive capital-forming benefits must think about how best to invest the money. There are several aspects that should be taken into account.

  • First of all, you should consider what goal you are pursuing with the investment. Do you want to invest the money for the long term or do you need it in the near future??
  • An important factor is also the risk one is willing to take. With higher yields there is also a higher risk. Here, everyone must weigh up for themselves what risk they are willing to take.
  • In addition, one should inform oneself about the different investment forms. There are various options, such as equity funds, fixed-income securities or savings plans.

Another aspect is the question of costs. When choosing an investment, you should consider not only the return but also the costs incurred in order to achieve the highest possible net return.

Ultimately, every investor should be aware that there is no guarantee of a specific return on investment. However, careful information gathering and a well thought-out investment strategy can help to achieve good returns.

The Riester subsidy for capital-forming benefits

Anyone who receives capital-forming benefits (VL) from their employer can look forward to additional financial support. With the so-called Riester subsidy, savers can top up their VL plus a state allowance.

But how does it work exactly? The employer pays a certain amount into the employee’s VL account each month. This amount can be invested in equity and bond funds as well as in building society savings contracts. If you also want to benefit from the Riester subsidy, you must take out a Riester contract and have your VL transferred to it.

Through this combination of VL and Riester contract, one receives a state allowance, which can vary in amount depending on one’s life situation. The amount of the VL payment and the allowance can vary annually and should therefore be checked regularly.

Anyone who invests their capital-forming benefits in a targeted and clever way can benefit from the Riester subsidy and build up solid assets over the long term.

The housing subsidy as a capital-forming benefit

The housing subsidy is one of the best-known state-subsidized capital-forming benefits in Germany. It is intended to promote the purchase of residential property. The premium is paid by the state and amounts to up to 8.8 percent of the annual savings amount. However, the subsidy depends on income, so you should find out the exact conditions before signing a contract.

An important aspect when choosing a capital-forming benefit is the right form of investment. Thus, there are various options in which to invest the money saved. Equity funds are particularly popular, but building society savings contracts also offer a secure and stable return. However, care should be taken to ensure that the minimum deposits and other costs and fees are kept within reasonable limits.

Another option is to purchase real estate. The housing subsidy can be used as start-up capital and the monthly installments can be topped up by the VL. This allows you to buy your own home more quickly and benefit from the advantages of home ownership.

All in all, if you take out a capital-forming benefit early on and invest the money correctly, you can look forward to a handsome return or a home of your own later on. However, one should make sure that the terms of the contract as well as the investment form correspond to one’s own needs and financial possibilities.

Leave a Reply

Your email address will not be published. Required fields are marked *