How much time and interest do you have to deal with stocks? Since you are reading my stock market newsletter, it can be assumed that you do this often and enjoy it. But maybe you sometimes lack the time. Or you want to invest money for your children or grandchildren in the long term without spending a lot of time specifically for it. In this case, ETF savings plans are ideal.

Gradual purchase at low prices Many ETFs are suitable for savings plans. This means that you can buy ETF shares for fixed, usually monthly rates. What makes savings plans so special? The most important thing is fractional buying.

This sounds complicated, but is quickly explained. Let’s say you invest 50 euros monthly in a DAX ETF, which is currently trading at around 160 euros. For your monthly savings rate, you don’t receive a full share, but currently only about 0.31 shares. If fractional buying were not possible, you could not buy the ETF via a savings plan for regular, fixed rates. But that has a tangible advantage: the cost average effect.

Imagine the ETF purchase via savings plan as if you were regularly driving to a gas station and always filling up for the same amount, for example 20 euros. What happens when fuel prices fluctuate strongly? If gasoline is expensive, your 20 euros will only buy you a few liters. If it is cheap, you can fill up with much more for the same amount of money. On average, this way you always get a good price. That’s the whole secret – even with ETF savings plans.

Because even with ETF savings plans, the fixed rates and fluctuating prices ensure that you buy little when the ETF price is high and a lot when the price is low. This way, you elegantly avoid the timing problem. You don’t have to think about when the best entry point might be.

Savings plans are extremely flexible Another advantage of ETF savings plans is that they simply run by themselves. You enter your savings rate in the order mask of your custody account bank, the ETF you want to save, the time interval (monthly, quarterly, semi-annually), and a start and end date. You also need to specify which account the savings rate should be debited from. The rest runs automatically. The custody account bank handles all purchases automatically, without you having to worry about it. In addition, the order costs are usually cheap. They are usually between 1.5 and 2% of the savings rate, which is manageable for everyone.

Through regularity, a nice fortune accumulates over time. You buy ETF shares month after month with discipline. With a longer investment horizon, you can expect a performance of 8 or 9% per year with a DAX ETF.

Although you save very discipline with savings plans, you are not bound to them. This is different, for example, when taking out a pension or life insurance policy. Because you can end the savings plan at any time, pause the savings rates, switch to another ETF, or increase or decrease the rates. You do not have to adhere to a fixed term. And there are no fees for the conclusion or termination. You only pay the order fees for the individual rate purchases.

If you ever realize that you need the money earlier, simply sell ETF shares according to your financial needs. Withdrawing money is also not a problem at all.