Free ETF savings plan: neon shakes up the market
Updated: Jul 4
neon - the free account app for smartphones has recently integrated a savings plan function into the Invest section. neon promises automated wealth accumulation with shares and ETFs at low cost. By offering free ETF savings plans, neon is once again shaking up the Swiss market and setting new standards.
📖 Overview
Welcome offer 🚀 CHF 30 trading cashback + free cardWith the code BW10 you will receive up to CHF 30 cashback on the fees for your first 3 trades. You will also receive your first card free of charge - normally the debit card costs CHF 20 for production and shipping. Learn more |
What are savings plans?
A savings plan offers the opportunity to invest regularly, cost-effectively and in a broadly diversified manner. In Switzerland, however, savings plans are unfortunately still a rarity. However, automating asset accumulation with the help of a savings plan is an important function for anyone who wants to build up their portfolio in a long-term and disciplined manner. Free savings plans, such as those offered in Germany by numerous neobrokers like Trade Republic or Scalable Capital, have not yet been available in Switzerland. It is also often not possible to become a client of a foreign broker as a Swiss resident. Although it is possible to set up a recurring investment with various Swiss brokers, this is usually subject to the normal fees for individual transactions and is therefore often not very attractive.
Savings plans vs. robo-advisor
Another option is to set up a standing order with a robo-advisor. With a robo-advisor, you receive a customised but digitally managed portfolio. Of course, this digital asset management is not free; management and custody fees of 0.4 to 0.8% of the investment amount are charged (varies depending on the provider and investment amount). With a savings plan, you put together your own portfolio. You can choose the ETFs you want yourself and are not limited to the robo-advisor's selection. Ideally, a savings plan is cheaper than a robo-advisor.
What are the advantages of savings plans?
But what are the benefits of investing regularly with a savings plan? If you start investing regularly at an early stage, you will benefit from the compound interest effect. You can use our compound interest calculator to simulate the growth effect with your own figures. You can also take advantage of the volatility of the capital markets. Although your portfolio is worth less after a stock market slump, you can acquire more company shares with each additional investment - you are buying shares at a bargain price, so to speak. One of the key advantages of savings plans is the automated implementation of your chosen strategy. You don't have to worry about the "right" time to buy - which is unpredictable anyway. The savings plan works without emotion, which is crucial for successful wealth accumulation.
The neon savings plans
With neon, you can set up a savings plan for up to three ETFs or shares. You define the amount to be invested in your investments each month - neon takes care of the rest for you. neon currently offers a selection of more than 240 shares and 70 ETFs. If you use neon as a salary account, for example, you can automatically invest part of your salary via a savings plan. You can also flexibly adjust and terminate savings plans. The selected savings plan is executed on the third day of each month. If you do not wish to continue the savings plan, you must therefore have cancelled the savings plan by the end of the month at the latest. If you have too little money in your account on the day of execution, no trade will be executed.
neon's free ETF savings plans
neon has also lowered the investment hurdles by allowing selected ETFs to be bought and held free of charge via a savings plan. With the free ETF savings plans, neon offers an ideal form of investment for long-term and cost-effective asset accumulation. Because when it comes to long-term asset accumulation, even a small saving in fees at first glance has a significant impact on the amount of assets saved. Until further notice, you pay no purchase fees when you buy the following products:
🌎 Invesco FTSE All-World | This ETF offers access to the global equity market and is one of the cheapest All-World ETFs with product costs (TER) of 0.15%. (ISIN: IE000716YHJ7) |
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🌱 Invesco MSCI World ESG Climate Paris Aligned | This ETF offers access to the sustainable global equity market. The product costs (TER) are 0.19%. (ISIN: IE000V93BNU0) |
🇨🇭 FuW Swiss 50 ETP | This is a tracker that includes the share price movements of the 50 largest Swiss companies. The product costs 0.72%. (ISIN: CH1292088809) |
🤖 Xtrackers AI & Big Data | This ETF tracks the performance of the Nasdaq Global Artificial Intelligence and Big Data Index. The product costs are 0.35%. (ISIN: IE00BGV5VN51) |
🔋 Xtrackers MSCI Global SDG 7 Affordable and Clean Energy | This ETF is designed to reflect the performance of companies that contribute to achieving the UN Sustainable Development Goals. The product costs are 0.35%. (ISIN: IE000JZYIUN0) |
📱 Xtrackers Nasdaq 100 | This ETF tracks the performance of the 100 largest non-financial companies listed on the Nasdaq. The product costs are 0.20%. (ISIN: IE00BMFKG444) |
🇺🇸 Xtrackers – S&P 500 | This ETF tracks the performance of the 500 largest US companies. The product costs are 0.06%. (ISIN: IE000Z9SJA06) |
ETFs give you a broadly diversified investment in hundreds of companies. The reported product costs are incurred annually and are based on the invested assets. The total expense ratio (TER) includes all costs incurred for managing the fund.
For technical reasons, trading fees are deducted from your purchase, but are refunded to your account within two working days. As neon does not charge any custody fees, the only remaining costs are the state stamp duty and the product costs (TER) of the ETFs. The standard transaction fees of 0.5% only apply in the event of a sale.
All other shares and ETFs are subject to purchase fees. These are 0.5% for Swiss shares and ETFs and 1% for foreign shares (there are no additional exchange rate fees). However, if you receive dividends in foreign currencies, this amount is automatically converted into CHF. Exchange rate fees of around 1.5% are charged for this. The tax statement is provided free of charge in the practical eTax format.
How can I set up a free savings plan with neon?
Open the neon app and click on the "Invest" tab. Scroll down to the "Savings plan" section and click on "Start saving". Use the "0% fees" filter to display all free ETFs. Select the ETF you want to save monthly and click on "Add to savings plan". Specify the amount you would like to invest each month. You can now add the fund to your savings plan.
You can currently save in a maximum of three ETFs via a savings plan with neon. You can also change or delete savings plans once they have been set up.
neon shakes up the Swiss market with free ETF savings plans
Many traditional banks still rely on actively managed funds, which are very bearable for them but expensive for customers. Digital providers such as neon, Yuh, Swissquote or digital asset managers such as findependent, Selma or True Wealth in particular offer asset accumulation using ETFs. Among foreign brokers, there are offers from Degiro or Flatex. Zuger Kantonalbank is one of the few cantonal banks that offer a passive fund savings plan.
Why do many banks only offer expensive active funds?
In addition to the limited range of ETF savings plans, high fees are another barrier to entry. With 0% purchase fees on selected ETFs and no custody account fees, neon has significantly lowered the barriers to entry. It remains to be seen how long it will take for players such as Raiffeisen or ZKB to follow suit. In any case, neon has launched an exciting offer for Swiss investors and has once again set the Swiss market in motion. In Germany in particular, (free) ETF savings plans have long enjoyed great popularity - now the Swiss can also benefit from them.
Conclusion: neon lowers the investment hurdles with the first Swiss free ETF savings plan
The absence of custody account fees and the free ETF savings plans set neon apart from the Swiss competition. This is the first opportunity in Switzerland to save in ETFs free of charge during the savings phase.
Only the product costs (TER) and the unavoidable stamp duty are incurred. A trading fee of 0.5% is only charged when the investments are sold. The 0% savings plans are particularly suitable for a long investment horizon, as no fees have to be paid to neon until the investments are sold. The lower the fees, the higher the return you get. Once you have set up the savings plan, the long-term wealth accumulation runs by itself.
Neon's ETF savings plans are one of the most effective methods for systematically building up assets over the long term. Low fees are crucial here, as fees always reduce investment performance - which is precisely why the lack of custody account fees and the free savings plan ETFs are so interesting.
Welcome offer 🚀 CHF 30 trading cashback + free cardWith the code BW10 you will receive up to CHF 30 cashback on the fees for your first 3 trades. You will also receive your first card free of charge - normally the debit card costs CHF 20 for production and shipping. Learn more |
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