Optimize your exemption order: How to secure your saver's lump sum

An exemption order exempts capital gains up to the saver's lump sum of €1,000 (single filers) or €2,000 (married couples filing jointly) from capital gains tax. If you want to optimize your exemption order, you distribute this allowance strategically to where the highest interest, dividends and capital gains accrue. Without an order, the bank retains 25 percent plus solidarity surcharge and forwards the amount to the tax authority.

What is an exemption order?

The exemption order is a request to a German credit institution to exempt your capital gains up to a certain amount from taxes. The legal basis is the saver's lump sum under § 20 para. 9 EStG, often also called the saver's allowance. If you do not submit an order, your bank automatically deducts capital gains tax.

Which income falls under this?

Tax-exempt income includes interest from savings accounts and fixed-term deposits, dividends from shares, distributions from funds and ETFs, and realized capital gains. The advance allocation for reinvesting ETFs is also covered by the exemption order.

The saver's lump sum in detail

Since 1 January 2023, a higher saver's lump sum applies. €801 became €1,000 for single filers, and €1,602 became €2,000 for married couples. These amounts remain unchanged in 2026.

How does an exemption order work?

Within your allowance, the bank pays your returns in full. Only above that does capital gains tax apply. The bank reports the actually exempted capital gains via your tax ID to the Federal Tax Office.

Rate of capital gains tax

Above the allowance, 25 percent capital gains tax plus 5.5 percent solidarity surcharge applies, effectively 26.375 percent. For church members, the tax burden is slightly reduced because church tax is considered a special expense.

Why the tax ID is mandatory

Without providing your tax identification number, the bank cannot process the order. The tax identification number has been mandatory since 2011. If it is missing, the credit institution must deduct tax even though an order is in place.

How to submit an exemption order

Most credit institutions provide a form in their online banking portal. You enter the desired amount, confirm your tax identification number, and set the term. The order can be issued for a fixed period or indefinitely, that is, until revoked.

Information you will need

• Your valid tax ID for both account holders in the case of joint investments
• The amount to be exempted per institution
• Information on church tax liability for correct taxation

After submission, the exemption typically applies retroactively to the beginning of the year if the order is issued in the current year.

Distribute exemption orders among multiple banks

If you spread your financial assets across multiple accounts and portfolios, you must strategically divide the allowance. Submitting an exemption order to multiple banks is explicitly permitted: you may split the saver's lump sum among any number of institutions.

The decisive rule for allocation

The total of all issued orders must not exceed the saver's lump sum. If you deposit €700 at the online bank and €300 at the savings bank, you will have fully exhausted your €1,000 allowance. This rule is monitored centrally by the Federal Tax Office.

How to correctly distribute your exemption order

Place the allowance where you expect the highest returns. A savings account with high interest rates or a portfolio with dividend stocks deserves a larger share than a rarely used secondary account. A practical allocation for €1,000 might look like this:

• ETF portfolio with dividends and distributions: €600
• Savings account with ongoing interest: €250
• Fund savings plan: €150

This way, you prevent returns from being taxed unnecessarily while the allowance remains unused elsewhere.

Distribute the saver's lump sum and align your portfolio for tax purposes

Distributing the saver's lump sum is about putting the entire allowance to work. Portfolio tax optimization begins with a realistic estimate of your expected capital gains per investment.

Estimate returns realistically

Calculate what interest your fixed-term deposits will earn over their term and what dividends your shares will provide. On this basis, plan the allocation. If your investment changes, adjust the order.

Keep an overview

Maintain a list of all exemption orders you have issued. This overview protects you from losing track and accidentally distributing more than the permitted amount. A quick look at the annual tax certificate from each bank shows how much allowance was actually used.

Optimize exemption order before year-end

An unused saver's lump sum expires at the end of the year. It cannot be carried over to the following year. That's why an annual review is worthwhile, ideally in November or December.

Exhaust any unused allowance

If allowance remains, you can strategically realize capital gains. Sell shares or ETFs with profits and repurchase them with a suitable time interval. This way, you use the allowance without fundamentally changing your investment. Be mindful of transaction costs and sufficient time between sale and repurchase.

Final deadline in the year

Changes are possible at any time during the year, but usually not retroactively. The last business day of the bank, often December 28 or 29, is usually the final deadline to have an effect for the current year.

Can I change or revoke the exemption order online?

Yes. Via online banking, you can adjust the amount at any time during the year or completely revoke the order. A revocation takes effect from the time of change, not for already settled returns.

How high should you set the amount?

Set the amount so that it covers your expected capital gains at the respective institution without exceeding the overall limit. If set too low, you forfeit allowance. If distributed too high, you risk exceeding the limit.

Exemption order exceeded: What happens then?

If multiple banks report more exempted capital gains together than your saver's lump sum allows, the excess will be detected at the Federal Tax Office. Section 45d EStG requires credit institutions to make this report.

Correction via tax return

You recover excess tax-free gains through your income tax return. The tax authority will demand the capital gains tax that was incorrectly not paid. Conversely, if you paid too much tax because you failed to submit an order, you can recover the money via Schedule KAP of your tax return.

No exemption order issued: the consequences

According to a survey cited by n-tv, about 16 percent of savers in Germany, or one in six, do not issue an exemption order at all. They waste money because the bank automatically deducts capital gains tax.

Recover money

If you overpaid in previous years, recover the capital gains tax via Schedule KAP of your tax return. The maximum annual savings is around €263.75 per person and about €527.50 for married couples.

Can an exemption order be changed retroactively?

For the current year, an exemption issued in January typically applies retroactively to the beginning of the year. However, a previous year that has already closed cannot be corrected via the order.

Can the order be issued for the past year?

No. It is no longer possible to issue an order retroactively for a past year. The only way to obtain a refund retroactively is through your income tax return and Schedule KAP.

Issue exemption order for children

Children with their own portfolio or savings account also have a claim to the full saver's lump sum. Issue the order in the child's name using their tax identification number.

Watch the threshold for family health insurance

At around €5,460 in capital gains, free family health insurance under statutory health insurance could be jeopardized. Carefully check this threshold if the child has significant capital assets.

Non-assessment certificate instead of exemption order

For people with very low income, a non-assessment certificate may be more worthwhile than an exemption order. It exempts capital gains beyond the saver's lump sum from tax.

When the non-assessment certificate pays off

If your income is below the basic exemption of €11,784 (as of 2026), apply for a non-assessment certificate from the tax authority. Children, students, and retirees with low income benefit because returns are paid out completely tax-free.

Favorable assessment: if your tax rate is below 25 percent

If your personal marginal tax rate is below 25 percent, request a favorable assessment via Schedule KAP. The tax authority will then tax your capital gains at the lower individual rate instead of the flat capital gains tax.

Exemption order at multiple credit institutions: special cases

Not every provider accepts an exemption order. Brokers without a German seat do not process exemptions; here you report the returns yourself in your tax return.

Reinvesting ETFs and advance allocation

With reinvesting ETFs, there is no distribution, and the tax only arises upon sale. However, an annual advance allocation applies, calculated from the base interest rate times the fund value. An existing exemption order also covers this allocation.

Married couples and shared allowance

Married couples issue a joint order for €2,000, regardless of who generates the returns. An order for €0 can enable loss offsetting across spouses, for example, when one partner's capital losses are offset against the other's gains.

Calculate exemption order: a simple approach

A three-step process has proven effective for keeping your finances on track. It ensures that no allowance is forfeited and no excess is incurred.

1. List all portfolios and accounts and estimate the expected capital gains per investment.
2. Allocate the saver's lump sum proportionally, with larger amounts to high-yield institutions.
3. At year-end, check the utilization and, if necessary, reallocate or realize gains.

This brief overview does not replace tax advice, but provides reliable guidance in practice.

Common mistakes in portfolio tax optimization

Many investors set up the order once and never adjust it, even though accounts and returns have long since changed. Others deposit the entire allowance at their primary bank while the broker realizes high gains tax-free.

These points deserve regular attention

• Outdated amounts that no longer match your current investment
• Missing tax ID, which renders the entire order ineffective
• Overlooked interest income on a newly opened savings account
• Duplicate allocation without overview of the total

Optimize exemption order: the key figures

Here are the central values for 2026 at a glance:

• Saver's lump sum single filers: €1,000 per year
• Saver's lump sum married couples: €2,000 per year
• Capital gains tax: 25 percent plus 5.5 percent solidarity surcharge
• Effective tax burden: approximately 26.375 percent above the allowance
• Maximum savings: up to €263.75 per person

Those who know these figures and consistently use the saver's allowance will maximize tax-free income from their capital assets. A well-maintained exemption order across all credit institutions is the simplest tool for this.

Summary for your practice

Check once a year whether your allowance is going where interest and dividends are highest. Keep the allocation in writing and adjust the order whenever you make a significant change to your investment. This way, your capital gains remain reliably tax-free up to the saver's lump sum, and the tax authority only sees what's left over.