In addition to the popular cryptocurrencies, ETFs and other investments, you can also put your money in so-called green investments. That gives you a tax advantage. But is green investing or green saving really attractive? And what are the catches?
Green savings or investments are there to encourage people to contribute to society, says financial planner Nihal Vogels of TAART By Nihal. “But that is often not profitable from a technical point of view. Such social projects cost a lot of money and then an interest payment or the return remains behind.”
Nevertheless, the government considers it important to stimulate investment within society. That is why there are special green funds or green banks. “These are designated by the government and the return on them is less high, but in return you get a tax advantage. If you have a lot of assets in box 3 for income tax, green investing or saving can be interesting.”
“Your deposited money is generally not easy to withdraw.”
Guido Rodenburg, Independer
There are two ways to invest money in a green fund: you can save money in a green savings account, and you can invest green in green funds indicated by the government (pdf). The banks that manage these funds must invest at least 70 percent of the ‘green’ savings deposited by private individuals in, for example, sustainable energy projects or organic farms.
“The green fund accounts were not always open to new savers and investors,” says Guido Rodenburg, Independer’s domain manager income and wealth. “They were popular because of the tax advantage, but there were not enough projects to lend the money to. Most funds are now open again for depositing (savings) money.”
Pay attention to the conditions
For example, banks such as ABN AMRO, ASN and Rabobank are running such green projects. “It is relatively easy to open such an account,” says Rodenburg. “But it is very important to look at the conditions. Your deposited money can generally not be withdrawn just like that, so it cannot be compared with the normal savings account that we all have.”
For example, Rabobank has as a rule that your investment is fixed for one year at a fixed interest rate. After that, the amount can be freely withdrawn again and the interest becomes variable. Vogels adds: “These terms differ per financial institution. This is because they want continuity in sustainable projects.”
What is your advantage?
People with a lot of money pay tax on their assets in box 3. Everyone has an exemption of 50,650 euros (for tax partners 101,300 euros). This is called the tax-free allowance and you do not pay tax on that part.
For green investments, an additional exemption of EUR 61,215 will apply in 2022 (for tax partners EUR 122,430). This means that you have a total tax-free allowance of EUR 111,865 per person if the value of your investments in green funds was EUR 61,215 on 1 January.
“You do it to contribute to society.”
Nihal Vogels, financial planner
In addition, an additional tax credit of 0.7 percent on your exemption will be added to your income tax return. “Whether it ultimately pays off depends on your own situation, in which return, total assets and income are determining factors,” says Rodenburg.
Green investing is therefore not attractive if you want to make a pure return on your investments. “You do it to contribute to society and you also have an extra return because you save on the capital yield tax,” says Vogels.
Do not wait to long
“A golden tip: usually people don’t start thinking about the net worth until the end of the year,” says Vogels. “But then funds or savings accounts are sometimes already full. Then you can no longer deposit and you have to wait until new funds are opened. You call that an issue. So look at that early on.”
“And when opening an account, also pay attention to the deposit guarantee system. It states how much and whether your savings will be reimbursed if the bank goes bankrupt.”
There are always risks associated with investing and investing. You have no guarantee that your money is well spent. Your investment can increase in value or remain the same, but you can also lose money or lose your invested amount completelytouch. Always be aware of that when you invest your money.