The benefits of investment savings accounts in Denmark

The benefits of investment savings accounts in Denmark

If you have been living in Denmark for a while now, you might have come across various savings accounts. Some of these specialise in one type of savings – such as education or home improvement.

We will be looking at investing instead of saving and the benefits of investment savings accounts.

Denmark is well known to be a tax-heavy country. One would not exactly expect it to encourage investments and other activities that lead to inflation, but surprisingly enough, it does!

However, those genuinely interested in building up their wealth through investments must check out investment savings accounts.

Here are some reasons why:

Interest rather than normal savings

As mentioned above, Denmark has always had a relatively high tax rate. Because of this, the interest earned on regular bank accounts is relatively low – but not so with investment savings accounts!

These specialised savings accounts earn higher interest than normal ones – up to 6% or even higher per year.

Investments without having to pay taxes

If you have been living in Denmark for a while now, chances are you have done your fair share of paying taxes by now. It means that your taxable income is probably pretty low at the moment. Luckily for you, most investments do not require you to pay any taxes whatsoever!

From stocks to bonds and mutual funds, anyone eligible can easily invest their money away from reach from the Government’s greedy hands. No need to create a company.

As previously stated, there are an array of investment savings accounts. One of these is mutual funds. This type of account does not call you the owner, or at least not formally so – no need to create your own company!

Of course, it will still be written in your name for documentation purposes- but it is more like joining an investment club than anything else.

investment savings accounts in Denmark

Taxes on dividends can be deducted

If you invest money into stocks and mutual funds, that means that you earn some dividends from this money.

So what happens with the taxes on the dividends? Fortunately enough, if your income falls below a specific cutoff, then you will be entitled to a tax deduction! It means that with some intelligent asset placement and deductions, you might end up paying fewer taxes than before.

So what are the benefits of investment savings accounts in Denmark exactly? As mentioned above.

High-interest rates for eligible investors without having to pay taxes Investments without having to create companies Taxes on dividends can be deducted Free tax assessment. If you meet certain conditions, clever asset placement, and deductions for lower taxes if you invest, your dividends are tax-deductible.

The benefits of investment savings accounts in Denmark

If you have been living in Denmark for a while now, you might have come across various savings accounts. Some of these specialise in one type of savings – such as education or home improvement.

People often compare investing with gambling, but this is a wrong way of thinking. Investing is a method of making your money grow, safer and more innovative – you have to take the proper steps, such as opening an investment savings account!

In a nutshell

  • Savings accounts are accounts where your money grows without taxation. You can get tax deductions on some of the interest you make.
  • The savings accounts in Denmark are called ‘Sparkassen’ (singular) and ‘sparekasser’ (plural), often just shortened to ‘skattely’, which means ‘tax haven’.
  • There are many sparebanks in Denmark, each focusing on certain types of customers or investments. Therefore some spare banks offer more than one type of account. This list is based on individual experience, opinions from online forums and the DSA’s membership directory for 2017.
  • Not all banks listed here may be available depending on whether you live inside or outside Denmark, but it’s worth checking what your options are.

This list is sorted into three categories: No fees, Low fees and Not recommended (because of high fees or bad conditions)

SPAREBANK ACCOUNTS WITHOUT FEES (in order of investment flexibility)

  • TopSparen ‘Ultimate’
  • Sparekassen Lolland
  • Sparekassen Vendsyssel

SPAREBANK ACCOUNTS WITH LOW FEES (highest to lowest investment flexibility):

  • Sparekassen Lolland
  • Sparekassen Sjalland
  • Spar Nord
  • Nykredit Bank
  • Nordjyske bank

SPAREBANK ACCOUNTS NOT RECOMMENDED (highest to lowest investment flexibility):

  • Sydbank (Danske Spil, Danske Invest)
  • Arbejdernes Landsbank
  • Lyseng Sparekasse
  • Kompar Sparekasse
  • Sydbank (Danske Invest, Danske Spil)

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