What to watch for with AVD savings plans

Tilman Freyenhagen

Published on 14 June 2026 · Updated on 15 July 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The new era of subsidised retirement provision: what is an AVD savings plan?

With an AVD savings plan, you should above all watch four key conditions: the minimum savings rate, the flexible execution intervals, the cost per savings-plan execution, and the options for automatic increases. Fee-free executions and low entry barriers secure the maximum return on your state-subsidised ETF investment in the long run. Such a savings plan lets you invest directly in equity ETFs for retirement from 1 January 2027, within the framework of the new Altersvorsorgedepot (AVD), with state subsidy and without contribution guarantees^[1].

This new product class marks the end of the era of expensive, non-transparent Riester pension insurance policies. While classic Riester contracts often ate up the return entirely through high administration costs and the obligation of a 100 percent contribution guarantee, the AVD savings plan puts long-term wealth building front and centre^[2]. For digitally savvy self-directed investors, this flexible model offers the ideal basis for managing your own retirement provision cost-effectively, independently and exactly to your own preferences. In our knowledge section we prepare all the legal framework conditions for you in an accessible way.

The four pillars of savings-plan optimisation

• Minimum savings rate: determines from what monthly amount you can invest. Low thresholds of 1 to 25 euros are ideal for maximum flexibility.
• Execution intervals: does the provider offer flexible cycles such as monthly, bi-monthly, quarterly or half-yearly, to match contributions to your income?
• Execution costs: fees per purchase substantially reduce the compound-interest effect. Fee-free savings-plan executions should therefore be the standard with your neobroker.
• Automatic increase: enables an automatic, percentage-based rise in the savings rate to counteract inflation and gradually boost wealth building.

To make full use of the potential of such an AVD savings plan, a mathematical comparison upfront is worthwhile. Since you can invest up to 6,840 euros a year with state subsidy under the new system, the ongoing account fees and savings-plan conditions play a decisive role for your final capital^[3]. With the subsidy calculator, you can simulate the long-term cost effect and check how much optimised savings-plan conditions affect your future pension compared with old contracts.

The minimum savings rate: how flexible is the entry for every saver?

When choosing a suitable Altersvorsorgedepot (AVD), the minimum savings rate is the first decisive criterion for long-term investment success. For self-directed investors, this threshold determines how flexibly the savings process can adapt to changing life circumstances. While traditional provision products often require rigid monthly contributions, modern neobrokers enable entry into ETF savings plans from very low amounts. Many brokers offer savings rates from one euro, while most of the market starts at 25 euros^[4]. This flexibility is especially valuable for young families and career starters, as it secures continuity of investment even in financially tighter months.

Beyond pure entry thresholds, savers also need to keep the state subsidy conditions in view. To receive the full state subsidy in the new Altersvorsorgedepot, an annual minimum contribution of 120 euros is required. This corresponds to a monthly rate of just 10 euros. In our knowledge section we show you how to determine the right savings rate and adjust it easily if needed. The subsidy calculator can also calculate how different savings rates and fee structures affect your expected final capital in the long term. A regular, even small, contribution is mathematically more effective over the decades than irregular lump-sum investments.

Execution intervals compared: finding the optimal savings rhythm

When setting up a savings plan for the new Altersvorsorgedepot (AVD), self-directed investors face the question of the optimal execution interval. The choice between monthly or quarterly execution has only a marginal long-term effect on pure performance, but considerably affects your liquidity planning and fee structure. Scientific analyses show that the savings rhythm is negligible for long-term returns, since market fluctuations even out over the decades^[5]. That means you should choose the frequency primarily according to your personal needs, not any supposed return advantage.

What matters most is timing it with your monthly salary. A monthly savings plan executed shortly after your pay arrives automates saving and protects against the temptation to spend the money elsewhere. If your income fluctuates, you might consider a quarterly interval. You should also take into account the fee structure of your chosen account provider. If the broker charges a fixed fee per execution rather than a percentage share, a quarterly execution can noticeably reduce the cost burden. Our knowledge section has detailed comparisons of account fees from different providers, to keep ongoing costs as low as possible over the decades.

Regarding the compound-interest effect and the cost-averaging effect, the rule is: the earlier the capital works in the market, the better. Monthly contributions make marginally more efficient use of compound interest, since the money is on average invested earlier. The cost-averaging effect offers psychological advantages, since it reduces the risk of an unfavourable entry point during volatile market phases. Our subsidy calculator is available for precisely planning your savings rate and calculating the state allowances, letting you easily simulate different scenarios. This gives you a straightforward way to determine the ideal path for your long-term wealth building.

Cost per execution: why fee-free savings plans protect your return

When systematically building up your Altersvorsorgedepot, the savings-plan conditions largely determine your eventual wealth. For self-directed investors regularly investing monthly instalments in ETFs, execution fees are the main focus. Even the smallest fee per transaction reduces the share of your capital that can actually work for you in the capital market. Besides direct transaction costs, annual account fees also play a role, which is why a careful provider comparison is essential. Detailed explanations of the statutory criteria can be found in our Altersvorsorgedepot guides.

The compound-interest effect and the statutory cost cap

The cost effect of execution fees over the decades is often underestimated. If a monthly rate of, say, 150 euros incurs a fee of 1.50 euros, this amounts to an immediate charge of 1.0 percent on every contribution. Over a savings period of 30 or 40 years, this costs you a noticeable amount of wealth through the compound-interest effect you forgo. To protect consumers from excessive charges, the legislator has set a clear limit for standardised product variants of the Altersvorsorgedepot: the average annual reduction in return from costs (effective costs) is capped at a maximum of 1.0 percent^[6]. With our subsidy calculator, you can calculate the exact impact of fees on your subsidised retirement assets. Please note: all model calculations are purely illustrative and do not constitute investment advice (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.).

Key savings-plan conditions at a glance

Automatic increases: protection against inflation

The automatic increase is an effective tool for offsetting the gradual erosion of money's value during the decades-long accumulation phase^[7]. In an Altersvorsorgedepot, this option is built directly into the savings plan and ensures that your monthly savings rate rises automatically by a fixed percentage at regular intervals. Without such an adjustment, the accumulated capital loses real purchasing power over the long term, since inflation reduces the real value of future payouts. If you calculate your provision goal via the knowledge section or the subsidy calculator, the substantial leverage effect of continuously rising savings rates on the final capital quickly becomes apparent.

Advantages of a percentage-based adjustment

A percentage increase in contributions, for example by two to five percent a year, offers significant advantages for self-directed investors^[8]. It mirrors typical salary progression over a working life and quietly raises your savings effort in step with your rising income. This removes the need to manually adjust the savings plan in your account every year. The continuous increase also means that the compound-interest effect is optimally exploited through the early increase in investment amounts in the first decades. This provides a solid basis for private retirement provision.

• Regular increase: the contribution usually rises annually or every two years by a fixed, agreed percentage, usually two to five percent.
• Inflation offset: the automatic increase ensures that the real value of your monthly contribution remains stable despite general price increases.
• Career alignment: the automatic increase tracks the typical career path of rising income over your working life.
• Right to object: you can generally object to the increase informally at any time, or pause the automatic increase, if your budget is tight.

Despite the benefits of an automatic increase, flexibility is a key criterion in retirement provision. A high-quality savings plan in an Altersvorsorgedepot is characterised by the fact that you can object to the automatic increase at any time. Should your income temporarily fall, or an unforeseen expense arise, the increase can be easily paused for the current year without cancelling the savings plan. When choosing the right account, self-directed investors should therefore check whether the respective broker allows this flexible adjustment free of charge and without hassle. A provider comparison helps you transparently compare the exact conditions of individual account providers.

Flexibility for fluctuating income: pausing or adjusting savings rates

A modern AVD savings plan must be able to adapt flexibly to unforeseen life circumstances, since available income can change over the decades. Unlike rigid, classic insurance products, the new Altersvorsorgedepot (AVD) offers the option to adjust your own savings rate to your current budget with just a few clicks^[6]. Whether the monthly contribution is temporarily reduced or increased, the process for changing your contribution is straightforward through online banking with modern account providers. For self-directed investors who manage their own wealth building, this unbureaucratic adjustment is a key quality criterion. Savers can also find out about the legal framework for state-subsidised retirement provision via the knowledge section.

Advantages of flexible savings rates for the self-employed and in tight spots

This flexibility is of vital importance especially for the self-employed and freelancers with irregular income. In strong-revenue months, the savings rate can be increased, while in leaner times or unexpected tight spots it can be paused without penalty fees. Temporarily suspending savings rates protects the portfolio from forced sales during crises. This lets investors secure their state subsidy without having to commit long term to a fixed monthly amount. If you want to calculate this dynamic precisely for your own planning, you can work through different scenarios with the subsidy calculator to determine the optimal balance between maximum allowance subsidy and personal liquidity. Note: the comparisons and examples shown here are for illustrative purposes. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.

Criteria for the provider comparison: choosing the right broker for the AVD

When choosing the right broker for your Altersvorsorgedepot (AVD), four conditions above all determine your long-term return: the minimum savings rate, flexible execution intervals, execution fees and options for automatic increases. As a self-directed investor, fee-free executions and low entry barriers are especially crucial for you to make optimal use of the compound-interest effect over the decades. Our guides show that even small cost differences on regular savings rates have a substantial impact on final capital.

A systematic broker comparison is essential to identify the ETF universe best suited to your investment strategy. While conventional Riester contracts often use expensive, inflexible insurance wrappers, the new Altersvorsorgedepot gives you a low-cost, self-directed ETF investment^[3]. With our subsidy calculator tool, which you can access directly, you can simulate the precise effect of different account fees on your net return compared with unsubsidised savings plans.

As a useful tool, our provider comparison is available to you, which you can access via our main portal, Vorsorgedepot-Lotse. This service lets you analyse tariffs directly based on your individual savings rate and determine the optimal neobroker for your private retirement provision. (Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

The path to a decision: how to plan your AVD savings plan optimally

To plan an AVD savings plan optimally, you should determine your individual subsidy rate and compare the terms of different providers. The best strategy combines a precise calculation of the state contributions with a careful selection of cost-effective tariffs. As a self-directed investor, this is where you lay the foundation for your long-term wealth building.

A three-step path is recommended for a structured decision-making process. First, use our subsidy calculator to calculate your exact state subsidy and the optimal savings rate. In the second step, our provider comparison helps you as a neutral orientation aid to assess neobrokers based on costs and ETF selection, while the knowledge section provides more in-depth guides. Finally, you weigh up whether to manage the investment entirely yourself or bring in an independent advice service for personal advice on complex tax questions.

In the actual savings-plan comparison, four key levers determine long-term investment success. The minimum savings rate determines from what amount you can flexibly get started, while the execution intervals govern your timing flexibility. Execution fees in particular can noticeably erode the return over the decades, which is why fee-free offers have the advantage^[9]. A regular automatic increase also ensures your contributions automatically keep pace with your income growth (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).