Most guides say: „ETF savings plan in a brokerage account, done." We ran the numbers – and found this only holds under one condition: if you change nothing for 20 years.
The moment you adjust your strategy. The moment an ETF is closed or merged. The moment you want to reallocate. That is when a brokerage account pays tax – and a policy does not.
Using the comparison engine Fonder, we tested the relevant ETF-linked policies against a standard ETF brokerage account at Trade Republic. Same contribution, same return, same term.
And upfront, because honesty matters: not every policy is worth it. One of those we tested trails the brokerage account in every scenario. The question is not whether a policy – but which one.
Before we show numbers, here are the assumptions. Without them, any comparison is worthless.
The assumptions
Contribution: €150 per month
Child's age at start: 2 years
Assumed return: 9.7% p.a.
Payout: at 18, 21 and 25
Comparison account: Trade Republic / Scalable (€18 annual cost)
Personal tax rate: 30%
Vorabpauschale (advance lump-sum tax): base rate 3.2%
Rebalancing: active
Fund switching: active (70% reallocation)
We compared six real, currently available tariffs from German insurers – using the Fonder comparison engine, which covers 21 companies.
Why we show ranges rather than names
Not out of reticence, but for accuracy: which tariff is right for a family depends on fund selection and investment horizon – not on who happens to come top in a table built on identical assumptions. A ranking would give you precisely the wrong basis for a decision.
Which tariffs fit your situation, and how they actually perform, we show you in conversation – with your numbers and full cost disclosure.
On the return assumption
9.7% reflects the long-term average of the MSCI World over roughly 50 years. For context: the iShares Core MSCI World returned 12.60% p.a. in EUR over the past 15 years (source: fondsweb, July 2026). So we are deliberately more conservative than recent history – without being pessimistic.
Important: this is an assumption, not a promise. Markets fluctuate. The MSCI World saw a maximum drawdown of over 34% in the past decade.
Why the Vorabpauschale and fund switching are in the model: a comparison without them is unrealistic. Both cost money in a brokerage account – and nothing inside a policy. This is exactly what most comparisons miss.
Contributed: €28,800
Best policy: around €62,900
Second best policy: around €61,900
ETF brokerage account (Trade Republic): around €60,600
Four further policies: between €57,600 and €59,800
The leading policies come out ahead – but the margin is still thin.
Around €2,300 separate the best policy from the brokerage account. On €28,800 contributed, that is roughly 8%. Noticeable, but hardly decisive.
Something else is more striking: the brokerage account lands in third place out of seven – four of the six policies compared fall behind it. Choose the wrong tariff and you would have been better off with a simple brokerage account.
The question is not „policy or brokerage account" – it is „which policy".
Contributed: €34,200
Best policy: around €89,200
Second best policy: around €87,500
Third policy: around €84,600
ETF brokerage account (Trade Republic): around €83,900
Three further policies: between €82,000 and €83,200
The brokerage account slips – from third place to fourth.
Three extra years are enough for another policy to overtake it. The gap to the best policy has more than doubled: from around €2,300 to around €5,200.
Contributed: €41,400
Best policy: around €138,000
Second best policy: around €134,700
Three further policies: between €126,200 and €129,800
ETF brokerage account (Trade Republic): around €125,600
Weakest policy: around €118,800
The brokerage account now sits sixth out of seven – only a single policy performs worse. The gap to the best policy now exceeds €12,400.
The trend at a glance
At 18: around €2,300 ahead (account in third place)
At 21: around €5,200 ahead (account in fourth place)
At 25: over €12,400 ahead (account in sixth place)
The lead does not grow linearly – it accelerates, while the account steadily slides down the field. That is no coincidence.
There is exactly one scenario in which a brokerage account beats the policies:
You buy one ETF, leave it untouched for 20 years, and then cash out in one go. No switching. No rebalancing. No adjustments. Nothing.
Only then does the account's single advantage – lower running costs – remain intact. The moment you act, capital gains tax applies: roughly 26.4% on every gain accumulated up to that point. On every single sale.
How likely is it that you will do nothing for 20 years?
Honestly: not very. And not because of a lack of discipline – but because reality intervenes.
ETFs disappear. Funds get closed, merged or restructured – and then you have to act, whether you want to or not. In a brokerage account, that triggers tax. In a policy, it does not.
Markets shift. Anyone who chose a European focus in 2005 sees it differently today. An index that is now over 70% US equities looked completely different 20 years ago – and will look different again in 20 years.
Life changes. The closer the goal comes, the more parents want to reduce risk. That entirely sensible step costs tax in a brokerage account.
Plans shift. „University" becomes „first flat"; 18 years becomes 25.
A policy is not superior because it is cheaper. It is superior because it lets you act without every decision being taxed.
If you are certain you will change nothing for 20 years, you do not need that. If you are not certain – and most people are not – you pay for every decision in a brokerage account.
Here is the real finding – and it is uncomfortable for the whole industry:
The gap between the best and the weakest policy is larger than the gap between policy and brokerage account.
At 25, roughly €19,200 separate the best policy from the weakest
Between the best policy and the brokerage account: about €12,400
What does that mean? A policy in itself is not a mark of quality. A weak policy is worse than a good brokerage account – considerably worse. Anyone telling you „a policy beats a brokerage account" has not done the calculation.
But the figures show only one dimension
The comparison engine calculates final capital assuming the same fund selection. What it cannot measure is what often matters most in practice:
How broad is the ETF range? Some tariffs offer a lean selection at lower cost. Others cost slightly more but give you considerably more room to manoeuvre – including sector and thematic ETFs that are simply not available elsewhere.
Both are sound choices – for different families. If you buy a world ETF and leave it untouched for 20 years, you do not need a wide selection and are better served by the leaner, cheaper option. If you want to set priorities or change course later, you depend on that selection – and paying a little more for it is entirely rational.
The right question is not „which policy pays the most?" but: „which one fits what I actually intend to do?"
And that is why this article ends with an offer to talk – not with a provider name.
A brokerage account is enough if …
You buy one ETF and genuinely never touch it again
You will cash out at 18 and know that today
You accept the annual Vorabpauschale
You want to manage everything yourself
A policy pays off if …
You expect to adjust something over the years
The money will work for more than roughly 18 years
You want tax-free switching and rebalancing
You want to use the 12/62 rule later (contract held over 12 years, insured person over 62 – then only half the gain is taxed)
Which policy depends on you. A lean cost structure pays off if you run a simple strategy. A broad fund selection pays off if you actually use it – for instance for sector or thematic ETFs that other providers do not offer at all.
What pays off in no scenario: a policy with a weak cost structure and no advantage in selection. Those exist on the market – and that is what we warn against.
If you already hold a policy through us: these figures do not replace advice. Which tariff was right for you depended on your fund selection, your horizon and your goals – not on a final-capital comparison built on identical assumptions. If you are unsure, talk to us. We will run the numbers with your figures.
One point that often gets lost: a policy does not have to end at 18. It can keep running and be transferred to your child. The child savings plan then becomes a lifelong wealth vehicle – and that is where it plays to its full strength.
We are brokers, and we are paid by the insurers – at different rates depending on the provider. That belongs at this point in the article, not in the fine print.
So we disclose
The methodology: Fonder comparison engine, assumptions as described above. We compared six real tariffs currently available from German insurers.
Why no provider names: a ranking by final capital under identical assumptions would be the wrong basis for a decision – it says nothing about which tariff suits your fund selection and your horizon. We disclose the specific tariffs in the advisory conversation, including all costs.
The limits of the numbers: the engine compares final capital assuming identical fund selection. It does not assess how broad a provider's ETF range is, or how flexible you remain over two decades.
The uncomfortable truth: one of the policies tested trails the brokerage account in every scenario. And over a 16-year term, a simple ETF brokerage account beats four of the six policies compared. We say so, even though we place policies.
A comparison in which your own product always wins is not a comparison – it is advertising.
Our aim is that you can follow the maths, and then judge whether our recommendation fits you.
Why assume 9.7% return?
It reflects the long-term average of the MSCI World over roughly 50 years. The last 15 years came in at 12.6% p.a. in EUR – well above that, so we are deliberately conservative. It is not a guarantee: the MSCI World saw a drawdown of over 34% in the past decade.
Why don't you publish a named league table?
Because it would mislead. The figures show final capital under an identical fund selection – they say nothing about how broad a provider's ETF range is, or how flexible you stay over two decades. A tariff that tops this calculation may be the wrong one for your situation. We name the specific tariffs in conversation – with your numbers.
What is the Vorabpauschale?
An annual advance tax in a German brokerage account levied on a notional gain – payable even if you sell nothing. It does not apply inside a policy.
What is the 12/62 rule?
If a contract has been held for at least 12 years and the insured person is over 62, only half the gain is taxed at the personal rate. A substantial advantage over long holding periods.
Does the highest final figure mean the best policy?
No. The engine compares final capital assuming the same fund selection. A lean cost structure works out better if you run a simple strategy. A broad fund selection is worth it if you actually use it – for instance for sector or thematic ETFs unavailable elsewhere.
Can I cancel a policy early?
Yes, but you lose the tax advantages and bear the acquisition costs. A policy is a long-term instrument – if you are unsure, a brokerage account gives you more flexibility.
I already have a policy through you. Did I get the wrong one?
Very probably not. The figures show final capital under identical assumptions – your situation is individual. Which tariff suits you depends on your fund selection, your horizon and your goals. If you are unsure, talk to us and we will run the numbers with your figures.
As of July 2026. Calculations performed with the Fonder comparison engine. Return assumptions are not promises. This article is general information and does not replace individual advice.
About the author
Erol Eren holds a Bachelor in Economics and is a founder of ETF4Kids, advising families and expats in Germany on child savings plans and family finances. ETF4Kids GmbH is licensed as a financial investment broker (§34f GewO), insurance broker (§34d GewO) and real estate loan broker (§34i GewO) by the IHK Region Stuttgart.
