German banks launch price war for new pension accounts

Over 70 providers are competing to offer new 'Altersvorsorge-Depot' (AVD) accounts starting January 1, 2027, driven by a 30% state subsidy that provides 45 euros on a 150 euros monthly contribution. The potential market size is estimated at 1 trillion euros by 2040. Trade Republic offers the account for free, covering fund costs for 51 ETFs, with founder Christian Hecker stating the product is not for profit but customer acquisition. ING offers a standard depot at 0.2% annually and an active depot from 0.03%, with a 50 euro start bonus.

Union Investment, the market leader in Riester funds with 1.8 million customers, charges 0.55% for its standard product, which critics call too expensive compared to competitors. Bitpanda offers free depot and fund costs for 2027-2029, excluding crypto assets. A 40-year simulation of 150 euros monthly plus subsidies shows final values ranging from 732,000 euros at 0% cost to 554,000 euros at 1% cost, a difference of over 178,000 euros. Providers like Flatex and Scalable offer temporary fee waivers with expiration dates, while Smart Broker requires 15 trades per year to maintain free status. Union Investment's Vorsorgechef Alberto Del Pozzo argued that zero-cost products are impossible due to the complexity of tax rules and pension regulations, but critics noted the high fees compared to digital competitors.