Costs for 1 EUR investing plans?

[SCiruelos]

I have got a question. Comdirect offer currently a new depot which should be at 0 cost for 3 years. This offer is valid until 31.03.

At the same time, they are offering recently investing plans as low as 1 EUR/saving rate. I think they are getting quite scared from Trade Republic, Scalable and all those.

However, it is unclear to me what will be the costs for these investing plans with 1 EUR/saving rate.

One should assume that there will not be costs for those investment plans. Is this correct?

[Thorsten_]

The so-called "Top-Preis ETF", "KomfortFonds" and "Top-Preis Fonds" are without cost in an investment plan. See https://www.comdirect.de/geldanlage/wertpapier-sparplan.html

All other shares/bonds/funds etc. are charged 1.5 % of the investment sum when buying via investment plan.

Listed "TOP-Preis ETF/Fonds/KomfortFonds" can lose that status at any time. Usually there are some changes at the beginning of each year.

[Krügerrand]

There are also "Top-Preis Fonds", which are actively manageged mutual funds, with a 100% discount on the purchase provision.

[SCiruelos]

Thanks. Interesting.

But if one invest 1 EUR/ rate, the cost will be 1 Cent or 2 Cents (because it can not be 0,015, which is strictly speaking 1,5%). They need to round up 0,015 either to 0,01 or 0,02.

Do you know that?

[Krügerrand]

The rounding rules for commercial purposes are, that you round up with a 5 and higher. Following that it would be 2 cent.

Edit:

Haha you tricked me by leading me on the wrong path.

The fee is already in the 1 EUR plan.

So to find out the fee in EUR it is 1,00/1,015 -1= which is 1,478 cents and you most likely will get fund shares in the value of 98,5222 cents, while 1 EUR will be debited from your account.

[Thorsten_]

Short: "It's complicated." 😉

Long:

1) Comdirect is working with 3 positions after decimal point for fractional shares.

2) Comdirect is not charging "investment sum + cost" but "investment sum including cost".

So it depends on the price of one share.

Let's do an example:

• 1 € invest splits up in 0.99 € for the investment plan and 0.01 € for charges (see @Krügerrand's posting one above which he wrote while I was typing this 😉 )
• NVIDIA CORP. DL-,001 (918422)  is around 820 € each. So for 0.99 € you'd get 0.99/820=0.001207... fractional shares.
• Given 3 digits after decimal point, Comdirect will buy 0.001 fractional shares. Calculated backwards they will then cost 0.001*820 €=0.82 €.
• 1.5 % charges are 0.82 €*0.015=0.01 € which results in 0.82 €+0.01 €=0.83 € you'll have to pay.

The lower the price for one unit, the closer this caluculation will hit the target of resulting in 1 € overall cost including charges.

I hope I made no mistake and this explains how Comdirect is calculating.

[SCiruelos]

Thanks a lot. Very useful.

However, they should indicate this clearly: fees ARE INCLUDED in the investment rate. They want to give people the "ilusion" that they do not pay fees by charging them the saving rate. What a cheap trick !

[Krügerrand]

Well, it is.

Nur 1,5 % des Ordervolumens pro Transaktion und Wertpapierkennnummer (in der Sparrate enthalten)

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https://www.comdirect.de/geldanlage/wertpapier-sparplan.html 

Any recomendations on font and size? 😉

[Thorsten_]

It's clearly stated when you set up an investment plan, it's in the bill you receive each time the investment plan is executed, it's in the "Preisverzeichnis" and so on. I can't see no illusion.

And by the way: the depot is always free of charge if you have an investment plan which is executed at least once per quarter. No need for a special offer.

[KWie2]

Hi,

splitting hairs with split shares?

First of all, some calculations here are not correct.

Where a split share purchased in a savings plan is not free of charge anyway (see above) 1,5% is already contained in the savings plan nominal.

In such a savings plan 1,00€ - ridiculously small as it may be -, 1,015 times the split price are up to 1,00€.

Comdirect, as of now, always truncates split shares to 3 digits, so the real amount of investment is always lower or equal than 1€/1,015 = 0,98522…€.

Hence, the fee will always be lower or equal 1€ - 1€/1,05 = 0,014778…€ that will be truncated to 0,01€.

Spoiler

Example:

You try to save 1,00€ of a non special product with a price of 123,45€ per share. 0,001 times 123,45€ = 12,3 €-cent (truncation of the numbers of shares to 3 digits).

Now 0,98522€/0,12345€ = 7,98 split share units. These will always be truncated - not rounded.  So You‘d buy 7/1000 times 123,45€ = 0,86€ plus 0,01€ fee equals 0,87€ withdrawn off Your account.

This is more interesting for the really poor, who can not maintain a reasonable savings rate at the most clumsy of times and still like their account to be kept free of charge.

All other applications of such a ridiculously low savings rate seem out of bounds to me.

Regards: KWie2