Q&A
I have now X DKK, what should I do with it?
Whether you've saved up a lot of money, inherited it, or come into it in some other way, it's important to handle it carefully. Take your time to adjust to your new financial situation and make decisions calmly and thoughtfully.
First, put the money in a bank account where it's safe. Then, forget about it and take time to plan your next steps. Spend enough time getting used to having the money and doing your research. Use resources like this wiki and talk to people you trust.
If you don't trust banks, remember that most home insurance policies only cover up to 25,000 DKK in cash if it's stolen. So, it's probably safer to keep it in a bank.
While you're figuring things out, don't touch the money. Avoid buying things, telling people about your money, or start investing in whatever catches your eye, thinking you are going to be the next Warren Buffett! Be patient and make well-thought-out decisions.
Where to safely store large sums of money?
As mentioned in 9. Insurances, if you have more than 100.000 EUR / 750.000 DKK, it's a good idea to split it and store it in multiple institutions to make most out of the Garantieformuen insurance. For example, you can use banks like Bank Norwegian and Lunar, which offer free accounts.
I've just seen lots of hypes about a Stock online, and it increased massively within the last 24h - if I'm not buying now, then it's too late?!
If you’re hearing about a hyped stock for the first time through online communities, like Reddit, it’s a guarantee that you are too late to ride any possible “wave”. These stocks are also commonly known as "meme stock", since they have no real tangible value or reason for their massive increase, except thousand of users blindly jumping on a train in hope of getting rich quick, or even just bots spamming. Weak hearted investors are pushed into investments out of fear of missing out the next GameStop (GME) or DogeCoin (Cryptocurrency) which have risen from mere cents to several (hundreds) dollars, yielding an increase of several thousand percent. The low prices of these stocks makes it even harder to resist buying into.
However, as time has proven over and over again, the majority of people overwhelmingly lost money on their investments. Heck, "Bed Bath & Beyond Inc." (BBBY), a once hyped stock, went bankrupt and no longer exists as a company. Do not use them as a source of financial advice.
Commonly, if you have a closer look at the hyping posts, most lack substance and just repeat hype and clichés. This is a clear sign they aren't worth taking seriously. If they had a real reason to believe these stocks were a good investment, wouldn't they say so?
Invest a Large Sum All at Once, or Over a Period of Months?
Investing a large amount of money all at one time, known as a "Lump Sum" investment, can be intimidating. What if the market drops by 5% the next day? Financial markets fluctuate, so it is often difficult to choose the best time to invest.
You might find it more comfortable to invest a set amount regularly over a period of time, no matter what the market is doing. This method, called "Dollar Cost Averaging," helps reduce the impact of short-term market changes by spreading out the cost of your investments. By buying over a period of time, you are purchasing stocks at the average price over the period, instead of one specific point at the start of that time period. This protects you from the stress of a big market drop right after you invest.
However, if the market goes up for a long time, you might miss out on some potential gains you would get with a Lump Sum investment. Despite this, Dollar Cost Averaging is a safer approach that might help you sleep easy at night. Statistically, you are more likely to get a higher return with a lump sum investment.
Minimizing Currency Exchange Fees
When you invest in foreign financial products—like the iShares MSCI ACWI UCITS ETF USD (Acc) (IUSQ), which is traded in EUR—or need to convert a large sum of money between currencies, you should be aware of the potentially significant exchange fees.
For example, as previously noted in [7. Costs of Investing], SAXO Bank charges a 0,25% foreign (currency) exchange (FX) fee on all currency conversions Nordnet only 0,15%. This applies whether you're:
- Investing in products like the IUSQ ETF using DKK, or
- Simply exchanging money between currencies (e.g., EUR to DKK or vice versa).
This means a 100.000 DKK investment could incur a 150 DKK fee—and you'd pay the same fee again when selling and converting back to DKK.
Currency exchange always comes at a cost. While these fees might seem minor, they can add up over time. Fortunately, there are ways to minimize or avoid them entirely.
InteractiveBrokers.ie
If you frequently trade in foreign products, then InteractiveBrokers.ie, a widely praised global alternative to SAXO and Nordnet, might be better for you. With their free plan, you can convert currencies with a 0,002% (or a minimum of 2 USD). However, there are a few trade-offs:
- No support for Danish tax-advantaged accounts like Aktiesparekonto or Månedsopsparingskonto.
- You must handle tax reporting yourself, as they don’t report directly to the Danish tax authorities.
For large single conversions, Interactive Brokers is particularly appealing. For example, converting 100.000 EUR to DKK would give you approximately 746.097 DKK, minus a small 14,93 DKK fee (calculated as 0.002% of 100.000 EUR, which is 2 EUR ≈ 2.34 USD ≈ 14,93 DKK).
This feature is intended strictly for trading purposes. Using it solely for currency exchange and then withdrawing funds may be considered an abuse of the system and could result in account penalties. If such misuse is detected, your account will receive a formal warning and be placed under monitoring for the next 30 days. Any additional violations during this period may lead to restrictions or even account termination. Technically speaking, you could convert large sums every 30 days and be fine, but doing so is at your own risk.
To convert money with InteractiveBrokers:
- Deposit money into your InteractiveBrokers account.
- Convert the currency internally.
- Wait three business days due to their withdrawal hold period.
- Withdraw the funds and transfer them to another platform like SAXO, Nordnet or your bank (There's no way InternationalBrokers.ie knows if you intend to use it for trading or not)
If you transfer DKK from Interactive Brokers to Nordea, Nordea charges a 60 DKK fee. This is because Interactive Brokers uses a SWIFT transfer for DKK, not SEPA. Interactive Brokers only supports SEPA EUR, not for DKK.
Atlantic Money
Atlantic Money is a digital service (not a bank) that allows users to convert money from GBP or EUR to 9 supported currencies at the market exchange rate, charging a flat fee of 3 GBP or 3 EUR.
This makes it especially cost-effective when converting amounts above 2000 EUR, where Nordnet's 0,15% fee would exceed 3 EUR. Atlantic Money is transparent, with no hidden fees.
Is your money safe with them since they’re not a bank? Your money is not protected by insurances during the short period when it's being exchanged. However, once the conversion is complete, the funds are held in a "segregated customer bank accounts", meaning your money must be returned to you even if Atlantic Money goes bankrupt.
Wise.com
Wise, registered in Belgium, is a 100% digital bank focused solely on low currency exchange, global transfers, and spending abroad via debit card. It doesn’t offer traditional banking features like loans or savings accounts.
Wise operates with a transparent fee model, offering near-market exchange rates with a small added fee. For instance, converting 100.000 EUR to DKK typically involves a 0.429% fee, but volume discounts can reduce this to around 0.351%. While this is higher than the fees from SAXO, Interactive Brokers or Atlantic Money, Wise supports over 40 currencies—making it ideal for more exotic transfers, such as converting South Korean Won (KRW), which other platforms might not support.
Contact Your Bank
For one-time large conversions, it’s worth contacting your bank directly. Some banks may offer favorable rates, especially if you negotiate or explain your needs. That said, e.g. Nordea charges 0,40% when exchanging between EUR and DKK.
What about Lunar, Revolut,...?
Lunar offers free currency exchange only when paying abroad with their credit card and only for subscribers on the Plus plan or higher, which costs 79 DKK/month. Internal currency conversions (e.g., for trading or transferring to another bank) incur a fixed fee of 0–50 DKK plus a 0,5% exchange fee.
Revolut, on the other hand, allows free foreign exchange for all purposes on the Premium plan or higher (75 DKK/month). However, their exchange rate is bad. For example, converting 100.000 EUR to DKK yields only 744.721 DKK, which is 0.19% worse than the market rate, effectively costing you 1.417 DKK in hidden fees. So while there’s no explicit fee, the poorer rate translates to a 0.19% exchange fee. Moreover, there have been multiple reports that Revolut's anti-money laundering system has frozen large conversions over several months.
Why can't we buy some S&P 500 ETFs like Vanguards VOO?
As a retail investor (little fishes like you and me), we can't buy certain products, such as the Vanguard S&P 500 ETF with the ticker symbol VOO, which is a highly recommended ETF in U.S. investment communities..
The reason is that the European Union requires a Key Information Document (KID) in the local language. This document provides a summary of information to help investors understand the nature and risks of the ETF or stock. Since there is no KID for the Vanguard S&P 500 ETF (VOO), you can't trade it in the EU without hurdles.
Some banks bypass this requirement by asking you to confirm that you understand what you're doing. For instance, SAXO requires you to take a test before allowing you to trade such products.
Stock Names: A, B, C, D, ..., X, Y, Z? What do they mean?
When companies or Mutual Funds issue shares, they often create different types, called share classes, where each letter represents a different class. Each class comes with its own set of voting rights, perks for shareholders, like dividend access and for Mutual Funds different entry/exit or annual management fees.
For example, Google's share structure includes three classes of Stocks: Class A, Class B, and Class C. Class A shares typically have one vote per share and are held by regular investors. Class B shares, primarily owned by the founders, carry higher voting power with 10 votes per share. Class C shares, usually held by employees, have no voting rights. This structure allows the founders to maintain control over major business decisions.
With Stocks: there's no universal rulebook dictating what each class must offer. One company's class B shares may give different rights than a different company's.
With Mutual Funds, share classes are more standardized. Different classes might have different fees and costs associated with them, but these definitions are consistent across different mutual funds. You can find those definitions here.
For ETFs and Danish Investment Funds, share classes don’t really apply. They don’t offer voting rights, and the fees are the same for everyone, so there’s no need for different classes.
Further improving taxes with "Tax Harvesting"?
You can sell investments for many reasons, like getting money for a new car or because you lost interest in a Stock. But with tax harvesting, you sell investments to lower the taxes you pay on profits.
Tax harvesting means selling investments to realize either a loss or a profit, whichever reduces the most tax payments. This is especially useful in a progressive tax system like Denmark's. However, tax harvesting can only be effectively applied to Stocks, Mutual Funds, and Danish Investment Funds — investments where you can decide when to sell and realize a loss or profit, which lets you control in which year taxes will be applied. In short, Securities that are taxed following the realization principle (Dk: Relaisationsprincippet). Losses can be forwarded to the next year if there has not been enough profits to cancel it out.
If you want to keep the investment, you can buy it again shortly after selling it. This resets the value basis, which is the amount your future tax will be calculated on. This procedure is called a Wash Sale.
Wash Sale
A wash sale happens when you sell an asset (whether at a loss or profit) to reduce taxes but buy it back soon after, if you do not want to miss out on any possible future profits. In the USA, you have to wait 30 days to repurchase the asset; otherwise, you can’t claim the tax benefits. This can be risky because the asset’s value might change a lot in 30 days.
Luckily, in Denmark, the tax authority SKAT is more lenient. According to SKAT:
A share sale followed by a buyback is recognized for tax purposes as a sale and buyback if, in the intervening period, there has been a real possibility of price fluctuations.
Source: C.B.2.1.4.10 Salg og tilbagekøb
Basically, you can buy the asset back after its value changes by just a few cents, but it’s best to wait at least one day.
Sure, you will have to pay all the broker and currency exchange fees for selling and re-buying, but they're considerably lower than the additional taxes you pay otherwise.
Note: Do not confuse with "Wash Trading"
Wash trading is when someone buys and sells the same Security repeatedly to create false activity and misleading information about its price or volume. This practice is illegal because it manipulates the market, making it appear more active and valuable than it actually is. Wash sale is not to be confused with Wash Trading.
Tax-Gain Harvesting
Tax-gain harvesting means selling a part of a good-performing investment to stay under the 61.000 DKK (80.000 DKK starting in 2025) profit limit and avoid higher taxes.
For example, if an investment is up by 90.000 DKK, you can sell 60.000 DKK and buy it back immediately using the wash sale method. This year, you’ll be taxed 27% on the 60.000 DKK profit. Next year, you’ll pay 27% on the remaining 20.000 DKK, plus or minus any new gains or losses from that year.
Here’s a comparison of taxes without and with tax-gain harvesting:
Without Tax-Gain Harvesting:
| Date Sold | Realized Profits | Paid taxes at 27% ( < 61.000 DKK) | Paid taxes at 42% ( > 61.000 DKK) |
|---|---|---|---|
| December 2022 | 0 DKK | 0 DKK | 0 DKK |
| December 2023 | 90.000 DKK | 16.470 DKK | 12.180 DKK |
| Total | 90.000 | 16.470 DKK | 12.180 DKK |
Total taxes paid: 28.650 DKK
With Tax-Gain Harvesting:
| Date Sold | Realized Profits | Paid taxes at 27% ( < 61.000 DKK) | Paid taxes at 42% ( > 61.000 DKK) |
|---|---|---|---|
| December 2022 | 60.000 DKK | 16.200 DKK | 0 DKK |
| December 2023 | 30.000 DKK | 8.100 DKK | 0 DKK |
| Total | 90.000 | 24.300 DKK | 0 DKK |
Total taxes paid: 24.300 DKK (4350 DKK less!)
Tax-Loss Harvesting
If you have investments that are losing money, you can sell them to create a loss, which can offset profits this year or next year, called Tax-Loss Harvesting. If you don’t want to lose the future potential gains of the investment, you can buy it back right away using the Wash Sale method.
For example, if you sell an investment (Stock A) for a profit of 90.000 DKK but have another investment (Stock B) that’s down by 30.000 DKK, you can sell 20.000 DKK of Stock B to offset the profit from Stock A. This means you’ll only be taxed on 60.000 DKK, while still having the 90.000 DKK profit. You can then buy back Stock B, resetting those losses using the wash sale method.
By using tax-loss harvesting, you reduce your net profits, possibly keeping your investment income under the higher tax rate and saving money on taxes.
About Storebrand Indeks - Alle Markeder A (STIIAM)
Storebrand Indeks - Alle Markeder A (STIIAM) is a fairly new Danish investment fund. Even though it should be taxed at 37% (Kapitalindkomst) using the inventory method (Dk: Lagerprincippet), it is somehow taxed at 27%/42% (Aktieindkomst) when realized (Dk: realisationsprincippet) — which is unusual because it's an accumulating ETF.
It's also the cheapest Danish investment fund, with a very low annual cost (ÅOP/TER) of 0,30%. However, because it's still new, not many people trade it yet. That means it has low volume, so you might lose some money when buying or selling it due to the price difference between buyers and sellers (the spread).
On top of that, tax rules have changed since Storebrand Indeks - Alle Markeder A (STIIAM) was launched. Twice, it was reclassified as an inventory-taxed (Dk: Lagerprincippet) Kapitalindkomst fund. But the people behind it have always managed to get it switched back to being taxed as an realization-taxed (Dk: realisationsprincippet) Aktieindkomst product.
Storebrand Indeks - Alle Markeder A (STIIAM) does not track the MSCI ACWI Index in its entirety. Instead, it follows a sustainable investment strategy, excluding companies involved in tobacco, defense and aerospace, coal-intensive utilities and mining, and parts of the oil industry. These exclusions align with Storebrand’s sustainability blacklist, which may appeal to environmentally conscious investors. However, for those strictly seeking maximum returns, this filtered exposure might be seen as a drawback.
Lastly, even though STIIAM is an accumulating Danish investment fund, you still have to pay some taxes every year. Each year, the fund earns dividends. Instead of paying them out to you, it reinvests them — that’s the “accumulating” part. But even if you don’t receive the money directly, those dividends are still taxed annually under inventory principle. You benefit from compound interest as your dividends are reinvested, but you also pay yearly taxes on them. These dividends are known as "technical dividends". Then, when you eventually sell the Danish investment fund, you’re taxed again — this time on the total gain minus the taxes you’ve already paid on those dividends.
Storebrand Indeks - Alle Markeder A (STIIAM) Taxation Example
- Purchase in 2025
You buy 50 units in 2025 at 2.080 DKK each → cost 104.000 DKK. - “Technical dividends” you never see in cash
2026: fund reports 10 DKK per unit. You pay taxes on 500 DKK
2027: fund reports 15 DKK per unit. You pay taxes on 750 DKK You pay in total dividend tax on those 1.250 DKK even though nothing is paid out. - Sale in 2028
2028: you sell the 50 units for 2.405 DKK each → 120.250 DKK.
Total gain = 120.250 DKK - 104.000 = 16.250 DKK. - Avoiding double tax
Because you already paid tax on the 1.250 DKK “technical dividends”, you subtract that amount from the total gain:
16.250 − 1.250 = 15.000 DKK is what you still have to tax when you sell.
In practice, this means that you must have spare cash each year to pay tax on money you didn’t actually receive.
What is a Market Maker?
A market maker is a professional trader or institution that’s always ready to buy and sell financial products like stocks or ETFs, so that others can trade instantly. Even if they don’t already have the shares you want to buy, they can often borrow them, find them quickly, or (in the case of ETFs) even create new ones by working with the ETF provider. This lets them offer you a trade almost instantly. They also help make sure that ETF prices stay close to the real value of what’s inside the fund. If prices drift too far, they step in and trade to bring things back in line. This protects investors from overpaying or selling too cheap. They make money by buying at a slightly lower price and selling at a slightly higher price—this small difference is called the spread.
The Power of Compound Interest (Accumulating products)
The compound interest effect—known in Danish as renters rente effekt—describes how reinvested returns can accelerate the growth of your investment over time.
When you invest in ETFs or Danish investment funds, they typically generate annual dividends. In the case of accumulating ETFs or funds, these dividends are not paid out to you. Instead, they are automatically reinvested into the investment, increasing your principal. As a result, in future years, you earn returns not just on your original amount but also on the reinvested gains.
Example:
- Year 1: You earn 1,000 DKK in dividends, which are reinvested.
- Year 2: You earn returns on both the original investment and the reinvested 1,000 DKK.
This compounding cycle continues year after year, allowing your gains to generate even more gains. Over time, this can lead to exponential growth of your investment. It’s a key reason why time in the market often outperforms attempts to time the market.
Why should we not invest in ETFs or accumulating Danish investment funds outside of an Aktiesparekonto?
To understand this, let’s compare two similar investment products that track the MSCI ACWI index:
| Product | Danske Invest Global Indeks KL (Dist) (DKIGI) | Xtrackers MSCI World UCITS ETF (Dist) (XZDW) | Danske Invest Global Indeks KL DKK h (Acc) (DKIGIADKKH) |
|---|---|---|---|
| Index | MSCI World | MSCI World | MSCI World |
| Type | Danish Investment Fund | ETF | Danish Investment Fund |
| Returns | Pays dividends | Pays dividends | Accumulating |
| ÅOP/TER | 0,40% | 0,25% | 0,40% |
| Tax type | Aktieindkomst (27% / 42%) | Aktieindkomst (27% / 42%) | Aktieindkomst (27% / 42%) |
| Tax due date | Realisation principle (DK:Realisationsprincippet) | Inventory principle (DK:Lagerprincippet) | Inventory principle (DK:Lagerprincippet) |
While the Xtrackers MSCI World UCITS ETF (Dist) (XZDW) (lower fee) or Danske Invest Global Indeks KL DKK h (Acc) (DKIGIADKKH) (accumulating, taking advantage of the compund effect) looks better on paper, it comes with a major drawback in the Danish tax system: it is taxed annually under the inventory principle (Dk: lagerprincippet) simply because they are ETFs or accumulating Danish investment funds.
Although the Xtrackers MSCI World UCITS ETF (Dist) (XZDW)_ (lower fee) or Danske Invest Global Indeks KL DKK h (Acc) (DKIGIADKKH) (accumulating, taking advantage of the compund effect) looks better on paper, it’s taxed every year on the entire gain, even if you don’t sell anything.
This is a problem: you need cash to pay tax every year — and that cash comes from money that could’ve stayed invested and grown over time. Simply because ETFs or accumulating Danish Investment Funds are inventory-taxed (Dk: Lagerprincippet)
With Danske Invest Global Indeks KL (Dist) (DKIGI), which is not an accumulating Danish investment fund, you’re only taxed on dividends annually. The rest of your gain isn’t taxed until you sell (realisationsprincippet). That means more of your money can stay invested earlier — and the earlier your money is invested, the more it compounds.
For Danish investors, this makes _ETFs or accumulating Danish investment funds outside of an Aktiesparekonto inattractive, precisely because there they are always taxed under the inventory principle (Dk: Lagerprincippet).
Any further resources that you can recommend?
Check out the r/dkfinance community on Reddit for helpful posts. Additionally, these websites have some good articles too: