{"id":1779292580,"date":"2026-06-30T09:09:13","date_gmt":"2026-06-30T09:09:13","guid":{"rendered":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/uncategorized-en-us\/compound-interest-in-the-altersvorsorgedepot-why-starting-early-changes-everything\/"},"modified":"2026-09-24T10:54:06","modified_gmt":"2026-09-24T10:54:06","slug":"compound-interest-in-the-altersvorsorgedepot-why-starting-early-changes-everything","status":"publish","type":"post","link":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/compound-interest-in-the-altersvorsorgedepot-why-starting-early-changes-everything\/","title":{"rendered":"Compound interest in the Altersvorsorgedepot: why starting early changes everything"},"content":{"rendered":"<article class=\"article\">\n<p class=\"avd-lead\"> Compound interest is the strongest argument for saving for retirement at a young age. In the <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/altersvorsorgedepot\/\">Altersvorsorgedepot<\/a> it works over decades, because all earnings stay in the securities account and earn returns themselves. If you start 10 years earlier, you often end up with twice as much. <\/p>\n<aside class=\"avd-callout tldr\">\n<p><strong>The key points at a glance:<\/strong><\/p>\n<ul>\n<li>Earnings generate further earnings, exponential growth<\/li>\n<li>Over 40 years your own capital grows fivefold<\/li>\n<li>Starting 10 years earlier = often twice the final balance<\/li>\n<li>Government allowances earn returns as well<\/li>\n<li>Costs work just as exponentially, only negatively<\/li>\n<\/ul>\n<\/aside>\n<section id=\"was-ist\">\n<h2>What is compound interest?<\/h2>\n<p> Compound interest means: not only does the amount you put in generate earnings, but the earnings already generated produce earnings of their own. Albert Einstein is said to have called it the <em>eighth wonder of the world<\/em> . The principle is simple, but the effect over long periods is dramatic. <\/p>\n<p> In the equity market the return fluctuates strongly from year to year; averaged over the past 100 years it was around 7% per year (MSCI World, roughly 5% adjusted for inflation). Anyone who consistently reinvests that return doubles their capital every 10 years. <\/p>\n<\/section>\n<section id=\"wie-funktioniert\">\n<h2>How does compound interest work in the Altersvorsorgedepot?<\/h2>\n<p> With the Altersvorsorgedepot, all distributions (dividends, interest, price gains) are automatically reinvested in the securities account; this is called <strong>accumulation<\/strong>. You pay no tax on these earnings during the accumulation phase, which strengthens the compounding effect further. <\/p>\n<p> The government allowances such as the <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/basic-allowance-in-the-altersvorsorgedepot-up-to-e540-per-year-from-the-state\/\">basic allowance<\/a> and <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/child-allowance-in-the-altersvorsorgedepot-e300-per-child-per-year\/\">child allowance<\/a> earn returns directly as well. An allowance of \u20ac540 a year, paid in for 30 years and earning 6%, comes to over \u20ac42,000 on its own. <\/p>\n<\/section>\n<div class=\"avd-callout zwischenfazit\">\n<p><strong>Why is time so decisive?<\/strong><br \/>Starting at 25 instead of 35 often means twice as much in the end. Time is the most important factor.<\/p>\n<\/div>\n<section id=\"beispielrechnung\">\n<h2>Worked example: \u20ac50 per month, 6% return<\/h2>\n<table class=\"avd-table\">\n<thead>\n<tr>\n<th>Investment period<\/th>\n<th>Paid in<\/th>\n<th>Final balance<\/th>\n<th>of which interest<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>10 years<\/td>\n<td>\u20ac6,000<\/td>\n<td>\u20ac8,300<\/td>\n<td>\u20ac2,300<\/td>\n<\/tr>\n<tr>\n<td>20 years<\/td>\n<td>\u20ac12,000<\/td>\n<td>\u20ac23,200<\/td>\n<td>\u20ac11,200<\/td>\n<\/tr>\n<tr>\n<td>30 years<\/td>\n<td>\u20ac18,000<\/td>\n<td>\u20ac50,300<\/td>\n<td>\u20ac32,300<\/td>\n<\/tr>\n<tr>\n<td>40 years<\/td>\n<td>\u20ac24,000<\/td>\n<td>\u20ac99,700<\/td>\n<td>\u20ac75,700<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p class=\"small muted\">Assumption: \u20ac50 per month, 6% performance per year, without taking subsidy and taxes into account.<\/p>\n<p> After 40 years, <strong>compound interest accounts for around 76%<\/strong> of the final balance. The actual payments of \u20ac24,000 are only a small part of it. That is the lever of retirement provision. <\/p>\n<\/section>\n<section id=\"vergleich-alter\">\n<h2>What starting 10 years earlier achieves<\/h2>\n<table class=\"avd-table\">\n<thead>\n<tr>\n<th>Start<\/th>\n<th>Contribution<\/th>\n<th>Paid in<\/th>\n<th>Final balance at 65<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>at 25<\/td>\n<td>\u20ac100\/month<\/td>\n<td>\u20ac48,000<\/td>\n<td>~ \u20ac200,000<\/td>\n<\/tr>\n<tr>\n<td>at 35<\/td>\n<td>\u20ac100\/month<\/td>\n<td>\u20ac36,000<\/td>\n<td>~ \u20ac102,000<\/td>\n<\/tr>\n<tr>\n<td>at 45<\/td>\n<td>\u20ac100\/month<\/td>\n<td>\u20ac24,000<\/td>\n<td>~ \u20ac49,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p class=\"small muted\">Assumption: 6% return per year, ending at 65.<\/p>\n<p> The 10-year head start at 25 is worth <strong>almost half the final balance<\/strong>, even though only \u20ac12,000 more was paid in. If you start early, you let compound interest work for you. <\/p>\n<div class=\"avd-callout\"><strong>Tip:<\/strong> Young savers also benefit from the <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/career-starter-bonus-e200-free-for-young-savers\/\">career starter bonus<\/a> of \u20ac200. Over 40 years, those \u20ac200 grow to around \u20ac2,000 in the securities account.<\/div>\n<\/section>\n<section id=\"kosten\">\n<h2>Why costs kill compound interest<\/h2>\n<p> What works for compound interest also works in reverse: costs act exponentially. One percentage point more in <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/reduction-in-yield-riy-in-the-altersvorsorgedepot-what-you-need-to-know\/\">Reduction in yield<\/a> does not cut 1% off the final balance but often 20 to 30%. <\/p>\n<table class=\"avd-table\">\n<thead>\n<tr>\n<th>Reduction in yield<\/th>\n<th>Final balance after 30 years<\/th>\n<th>Loss through costs<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>0.3%<\/td>\n<td>~ \u20ac100,000<\/td>\n<td>\u2014<\/td>\n<\/tr>\n<tr>\n<td>1.0%<\/td>\n<td>~ \u20ac85,000<\/td>\n<td>~ \u20ac15,000<\/td>\n<\/tr>\n<tr>\n<td>1.8%<\/td>\n<td>~ \u20ac72,000<\/td>\n<td>~ \u20ac28,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p class=\"small muted\">Assumption: \u20ac100\/month, 6% gross return, 30 years.<\/p>\n<p> That is why low-cost <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/etfs-in-the-altersvorsorgedepot-the-heart-of-the-new-retirement-provision\/\">ETFs<\/a> in the Altersvorsorgedepot are almost always the better choice than expensive actively managed funds. <\/p>\n<\/section>\n<section class=\"avd-faq\" id=\"faq\">\n<h2>Frequently asked questions about compound interest<\/h2>\n<details>\n<summary>Do I need high contributions for compound interest to pay off?<\/summary>\n<p>No. Even \u20ac25 to \u20ac50 a month is enough if the investment horizon is long enough. What matters is time, not the absolute amount.<\/p>\n<\/details>\n<details>\n<summary>Does compound interest work with guarantee products too?<\/summary>\n<p>Yes, but more weakly. The <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/contribution-guarantee-in-the-altersvorsorgedepot-optional-instead-of-mandatory\/\">contribution guarantee<\/a> forces the provider to put part of the capital into low-interest bonds. The gross return falls from a typical 6% to 3 to 4%, which almost halves the compounding effect.<\/p>\n<\/details>\n<details>\n<summary>What is the rule of 72?<\/summary>\n<p>A rule of thumb: 72 divided by the return gives the doubling time. At a 6% return your capital doubles every 12 years, at 8% every 9 years.<\/p>\n<\/details>\n<details>\n<summary>Does compound interest work in the decumulation phase too?<\/summary>\n<p>Yes, if you opt for a <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/drawdown-plan-to-age-85-the-flexible-alternative-to-a-life-annuity\/\">drawdown plan to age 85<\/a> . The remaining capital in the securities account stays invested and generates earnings until the account has been paid out in full.<\/p>\n<\/details>\n<details>\n<summary>Where can I see how much compound interest I give up by starting later?<\/summary>\n<p>In our <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/altersvorsorgedepot-calculator-extended\/\">AVD calculator<\/a> you can work through different starting ages and see the difference directly.<\/p>\n<\/details>\n<details>\n<summary>What happens in a bad market phase?<\/summary>\n<p>Over short periods, markets fluctuate strongly. Over 30+ years the fluctuations even out and the compounding effect prevails. Historically there has not yet been a 30-year period in which a broadly diversified world ETF made a loss.<\/p>\n<\/details>\n<\/section>\n<div class=\"avd-callout zwischenfazit\">\n<p><strong>Do the allowances earn returns as well?<\/strong><br \/>Allowances and the bonus earn returns too: a \u20ac200 career starter bonus becomes around \u20ac2,000 over 40 years.<\/p>\n<\/div>\n<section class=\"avd-weiter\">\n<h2>Keep calculating and reading<\/h2>\n<p class=\"avd-weiter__rechner\"><strong><a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/altersvorsorgedepot-calculator-extended\/\">Altersvorsorgedepot calculator Plus<\/a><\/strong> \u2014 calculate the subsidy, tax advantage and final balance for your own situation.<\/p>\n<ul class=\"avd-weiter__links\">\n<li><a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/regular-savings-plan-in-the-altersvorsorgedepot-save-into-etfs-automatically-every-month\/\">regular savings plan<\/a><\/li>\n<li><a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/inflation-and-purchasing-power-what-your-securities-account-will-really-be-worth-in-30-years\/\">Inflation and purchasing power<\/a><\/li>\n<li><a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/returns-in-the-altersvorsorgedepot-what-is-realistically-achievable\/\">return<\/a><\/li>\n<\/ul>\n<p class=\"avd-weiter__zielgruppe\">Related content: <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/altersvorsorgedepot-for-young-people\/\">Altersvorsorgedepot for young people<\/a>.<\/p>\n<p class=\"avd-weiter__lexikon\">All terms at a glance: <a href=\"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/what-is\/altersvorsorgedepot-glossary-all-terms-from-a-to-z\/\">Glossary from A to Z<\/a>.<\/p>\n<\/section>\n<section class=\"avd-sources\">\n<h2>Further information<\/h2>\n<ul>\n<li><a href=\"https:\/\/www.bundesbank.de\/de\/service\/statistik-suche\" rel=\"external nofollow\" target=\"_blank\">Deutsche Bundesbank, return statistics<\/a><\/li>\n<li><a href=\"https:\/\/www.test.de\/Altersvorsorgedepot-4910361-0\/\" rel=\"external nofollow\" target=\"_blank\">Stiftung Warentest, retirement provision model calculations<\/a><\/li>\n<li><a href=\"https:\/\/www.verbraucherzentrale.de\/wissen\/geld-versicherungen\/altersvorsorge\/neues-altersvorsorgedepot-rentenchance-oder-teure-verkaufsfalle-118178\" rel=\"external nofollow\" target=\"_blank\">Verbraucherzentrale, the Altersvorsorgedepot assessed<\/a><\/li>\n<\/ul>\n<\/section>\n<\/article>\n","protected":false},"excerpt":{"rendered":"<p>Compound interest in the Altersvorsorgedepot: how contributions multiply over decades, with worked examples for 10, 25 and 40 years of investment and the effect of early contributions.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_metasync_otto_title":"","_metasync_otto_description":"","_metasync_otto_keywords":"","_metasync_otto_og_title":"","_metasync_otto_og_description":"","_metasync_otto_twitter_title":"","_metasync_otto_twitter_description":"","rank_math_title":"","rank_math_description":"","_yoast_wpseo_title":"","_yoast_wpseo_metadesc":"","_aioseo_title":"","_aioseo_description":"","_metasync_seo_title":"","_metasync_seo_desc":"","_metasync_breadcrumb_title":"","_metasync_primary_category":0,"_metasync_primary_product_cat":0,"_metasync_otto_disabled":"","_metasync_hreflang":"","_metasync_plugin_sync_ts":"","_metasync_robots_advanced":"","footnotes":""},"categories":[68],"tags":[69,78,75,71,76,85],"class_list":["post-1779292580","post","type-post","status-publish","format-standard","hentry","category-what-is","tag-altersvorsorgedepot","tag-career-starter-bonus","tag-etf","tag-reduction-in-yield","tag-regular-savings-plan","tag-return"],"_links":{"self":[{"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/posts\/1779292580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/comments?post=1779292580"}],"version-history":[{"count":0,"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/posts\/1779292580\/revisions"}],"wp:attachment":[{"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/media?parent=1779292580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/categories?post=1779292580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/altersvorsorgedepot-anbieter-vergleich.de\/en\/wp-json\/wp\/v2\/tags?post=1779292580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}