If you receive dividends, it may be worthwhile earning return on them until you need them to invest in other assets. Examples include dividends from shares, ETFs, REITs or other exchange-traded investments. Are you wondering how this return can be earned as simply and easily as possible? In this article, we introduce you to Freedom24, a provider that enables you as an investor to build up recurring revenue through reinvested dividends as easily as possible!
In brief:
- With this promotion you can get an average of 79 to 529 euros in shares as a gift
- Reinvesting can help you build up recurring revenue through reinvested dividends
- The provider Freedom24 offers low costs and a large selection of
Dividends with the buy-and-hold strategy
Perhaps you are one of those investors who dream of building up recurring revenue through reinvested dividends. To do this, it is generally advisable to take a closer look at all the options. One strategy that is particularly easy to implement is earning return from dividends.
If you invest in shares, ETFs or REITs, you will regularly receive dividends. Many investors reinvest these profits in other investments sooner or later. Reinvesting these dividends is a particularly good way to build up additional income.
Good to know:
This is related to Warren Buffett’s buy-and-hold investment strategy. It is a well-known passive strategy with the aim of recognising growth potential in companies and their shares. These securities are to be held over long periods of time in order to benefit from a positive increase in value.
Of course, as an investor, you may not want to use the dividends to reinvest in the same shares or ETFs. Instead, you are free, for example, to invest in distributing ETFs and not use accumulating exchange traded funds. This offers you the advantage of being able to store your distributed assets in the account for a certain period of time or invest them in other asset classes.
It is generally advisable not to store your money for too long. Investing further can be worthwhile, especially in times of record return rates. In summer 2023, the European Central Bank raised the key return rate again and it now stands at 4.25 per cent.
Anlagen sind stets mit dem Risiko eines Verlusts verbunden. Die WELCOME-Aktion unterliegt
den Allgemeinen Geschäftsbedingungen. Die Geschenkaktien werden nach dem Zufallsprinzip aus einer Auswahl teilnahmeberechtigter Aktien zugeteilt, wobei Aktien mit höherem Wert seltener vergeben werden.
Comparison: What does the broker offer me?
It is worth comparing the provider Freedom24, which offers advantages such as low costs and a large selection of trading centres. One particularly positive aspect is the large range of tradable assets such as shares, ETFs and options.
How can I benefit from returns?
The following table shows the current return rates for custody accounts with some of the most popular brokers in Germany. As you can see, Freedom24’s return rates seem to be in the middle range when you look at the offers of the other providers.
| providers | Current return rate (in per cent)(as at September 2023) | Restrictions | Return for existing customers (in per cent) |
| Freedom24 | 2.50/3.00 | No limit, no time restrictions, but 7 euros per payout | 2.500/3.00 |
| Consorsbank | 3.50 | Valid for 6 months only, new customers only, up to 100,000 euros | 0.80 |
| 1822direkt | 3.60 | Valid for 6 months only, new customers only, up to 100,000 euros | 0.60 |
| SBroker | 3.20 | Valid for 6 months only, new customers only, up to 100,000 euros | 1.25 |
| Trade Republic | 2.00 | Only up to 50,000 euros | 2-00 |
| ComDirect | 3.25 | Valid for 12 months only, new customers only, up to 100,000 euros | 3.25/0,70 |
| Scalable Capital | 4.00 | Only valid for 4 months, up to 100,000 euros, only with 4.99 euros / month subscription | 4.00 |
However, it is worth taking a closer look at the conditions, which include some restrictions. Freedom24 is the only provider listed that does not have a maximum investment. There are also no time limits, i.e. a specific point in time after which you will be downgraded to a lower rate. Only the provider’s 7 euro withdrawal fee stands out negatively and should be taken into account.
It is also worth taking a look at the return rates for existing customers, as these fall considerably after the new customer status expires. With providers such as Scalable Capital, return rates do not fall, but only if you take out a monthly subscription. With Freedom24, you can keep your return at the same level even after you have been categorised as an existing customer.
Attention!
The 2.50 per cent at Freedom24 is return on euro investments, the 3 per cent applies to US dollar investments. For example, if you have invested in Apple and receive a dividend in US dollars, you do not have to exchange anything and can earn return on your dividend of 3 per cent on the D savings account until you wish to reinvest or withdraw your profits.
The same applies to investments in German companies. You can simply move the dividends you earn to the D savings account so that your money can work for you and generate further returns until you have other plans for it.
If these return rates sound interesting to you, you might be particularly pleased about Freedom24’s current bonus promotion. You currently receive 3 to 20 shares as a gift, which are worth an average of 87 dollars and a median of 29 dollars.
For your calculation, we use the median, i.e. the middle value, to get a realistic result. Nevertheless, you can be lucky and get very expensive shares such as Netflix, Goldman Sachs or Microsoft.
If you plan to invest at least EUR 5,000, you will receive 3 donated shares for an expected value of EUR 79.35 if you hit the median three times. The following calculations are based on the same methodology. If you invest 20,000 euros, you as an investor will receive the previous 3 shares, including 7 additional shares, totalling 264.50 euros.
Attention!
If you want to invest 50,000 euros, you will receive the 10 shares from the previous levels plus another 10 shares as a gift. This means that you as an investor can receive a total of 20 shares as a gift, with a total value of around 529 euros.
Attention!
| Amount invested (in euros) | Number of bonus shares donated | Expected median value of the shares donated (in euros) |
| 5.000 | 3 pieces | 79 |
| 20.000 | 10 pieces | 264,50 |
| 50.000 | 20 pieces | 529,00 |
Anlagen sind stets mit dem Risiko eines Verlusts verbunden. Die WELCOME-Aktion unterliegt
den Allgemeinen Geschäftsbedingungen. Die Geschenkaktien werden nach dem Zufallsprinzip aus einer Auswahl teilnahmeberechtigter Aktien zugeteilt, wobei Aktien mit höherem Wert seltener vergeben werden.
Conclusion: recurring revenue through reinvested dividends
In this way, you can build up a global, diversified portfolio consisting of different shares or ETFs. You can use dividends received or freely available money to build up recurring revenue through reinvested dividends. A provider like Freedom24 can help you do this by offering you a very large selection and low costs. If you are interested in the provider in more detail, you can find a detailed Freedom24 experience report here.
This product is not a banking service and is not related to a bank deposit or a bank account. This product is an investment in OTC swaps, and may not be appropriate for every investor. The ability to provide access to a particular financial instrument is subject to an appropriateness test.
Investing is a risk. Past projections and results are not reliable indicators of future performance. It is essential to conduct your own analysis before making any investment. If necessary, you should carefully seek independent investment advice from a certified specialist.
