Estonia’s Savings and Investments Account (Investeerimiskonto): A Blueprint for the EU’s Savings and Investments Union (SIU)

The European Commission’s Savings and Investments Union (SIU) strategy, published in March 2025, aims to mobilise household savings into productive investments and deepen EU capital markets.

A central pillar is the creation of savings and investments accounts that are simple, digital, and attractive for retail investors.

As the SIU Communication puts it:

“Experience in some Member States has already shown the potential for savings and investments accounts to boost retail participation in capital markets, especially when such accounts are matched with appropriate incentives. In the more successful examples, those savings and investments accounts are easy to use and designed with digital interfaces that give access to a wide range of appropriate products, offer preferential tax rates or simplified tax processes, and allow a change of provider for no or low cost.”
— European Commission, SIU Strategy (March 2025)

One of those “successful examples” already exists: Estonia’s savings and investments account (investeerimiskonto). It is a proven model that combines tax efficiency, digital simplicity, and broad eligibility of assets - including innovative ones like crowdfunding and crypto-assets, and traditional ones such as insurance-linked investments.

Key Benefits

• Tax Deferral – Normally, capital gains are taxed when realised. With the investeerimiskonto, you only pay tax when you withdraw more than you contributed. This allows investors to compound their returns without annual tax drag.
• Simplicity in Tax Reporting – Instead of declaring each transaction, you only need to declare contributions and withdrawals once per year in your income tax return.
• Flexibility – You can use multiple accounts (as long as you register them as investment accounts with the Tax and Customs Board) and transfer funds between them.
• No Double Taxation – Dividends received from Estonian companies are usually tax-free for individuals, and dividends from foreign companies can be routed through the investment account, avoiding immediate taxation until withdrawal.

How It Works in Practice

Step 1: Open an Account – Most major banks in Estonia offer the option to register an account as an investeerimiskonto.

Step 2: Register with the Tax Board – You must indicate in your annual tax return which account(s) you are using.

Step 3: Fund and Invest – Transfer money in, buy and sell, or receive dividends.

Step 4: Declare Only Contributions and Withdrawals – At the end of the year, you declare how much you put in and how much you took out. If withdrawals exceed contributions, the difference is taxable.

Example
Suppose you deposit €10,000 into your investeerimiskonto and invest in stocks. Over time, your portfolio grows to €15,000. If you withdraw €5,000, this counts as a tax-free withdrawal because it does not exceed your original contributions (€10,000). Only if you withdraw more than €10,000 (your contributions) will you start paying income tax on the gains.

What Assets Are Covered

One of the strengths of Estonia’s system is its broad, innovative scope. It is not limited to traditional stocks and bonds but also extends to new forms of investment. Eligible assets include:

• Shares and bonds traded on regulated markets.
• Units in investment funds and ETFs.
• Bank deposits and interest.
• Derivative instruments and spot contracts tied to financial assets or currencies.
• Unit-linked life insurance contracts – ensuring that long-term savings and insurance-based investments are not left out.
• Crowdfunding instruments – loans or securities acquired via licensed crowdfunding service providers (since 2024).
• Crypto-assets – as of 2025, crypto-assets purchased via MiCa-licensed providers may also be included.

This means that the Estonian account framework is future-facing: it covers not just the old economy of stocks and bonds, but also the new economy of crypto and crowdfunding, while recognising the continued importance of insurance-based products.

Why Estonia’s Model Fits the SIU Vision

Looking at the SIU strategy’s objectives, Estonia already checks many of the boxes the Commission has identified:

Why This Matters for the EU

The SIU strategy recognises that retail investors often keep money in low-yield bank deposits rather than participating in capital markets. Estonia’s investeerimiskonto provides a tested model that overcomes this by:

• Offering a clear, user-friendly tax framework that encourages investment.
• Ensuring access to both traditional and innovative assets in a regulated, digital environment.
• Demonstrating that insurance, long-term savings, and new asset classes can coexist under one umbrella.

As the EU moves toward creating a blueprint for savings and investment accounts, Estonia’s experience can provide valuable lessons. Its system shows that digital simplicity, broad eligibility, and trust in regulation are key to building accounts that citizens actually use.

Final Thoughts

The European Commission wants to scale up household participation in capital markets through accounts that are simple, digital, and tax-efficient. Estonia’s savings and investments account (investeerimiskonto) already delivers on these goals and goes further by integrating crowdfunding, crypto-assets, and insurance-based investments into the same framework.

For Brussels, this is not just a policy ambition on paper. It already exists in practice - here in Estonia. And it could well serve as a blueprint for the wider EU Savings and Investments Union.

P.S. I’ve started working on a paid report on how the Estonian system works in practice – covering structure, eligible assets, taxation, treatment of IBIPs, crypto, crowdfunding, and grandfathering rules. If you’d like early access once it’s ready, contact me.