Inflation, recession, climate, war: At the moment nobody really knows where the journey is going. And should you invest money for your children in the long term? And if so, in what form please: training insurance, savings plan, fixed deposit, children’s depot? Our test shows: It’s actually very easy.
We explain which investments are really worth saving – and how relatives and friends can also save. And we say what you should keep your hands off if you want to build up long-term wealth that the child will have at its disposal when it grows up.
Saving for children: why our comparison is worthwhile for you
- The best investment for you. The tables from Stiftung Warentest show which banks have custody accounts that are particularly attractive for minors, which ETFs can be saved and where the highest interest rates are for five-year and ten-year time deposits.
- background and classification. We tell you how best to save for your child. You will read what to think of combined policies and gold savings plans and why the right mix of security and risk promises the most success when investing.
- Tips and Tricks. You will learn about the tax advantages of investing money in the child’s name – and what you need to bring with you when you open an account in order not to jeopardize your entitlement to student loans and free health insurance.
- magazine article. If you unlock the topic, you will get access to the PDF for the test report from Finanztest 11/2022.
Saving for the child: The right investment
Training insurance, robo-advisors, gold savings plans: the financial industry is always coming up with new products to get investors’ money. That is not always in their interest. We classify the various offers and explain why the Finanztest investment strategy (slipper portfolio) is also recommended when saving for children. You will learn why free ETF savings plans, which can be taken out directly with banks, are so flexible and convenient. And what you need to consider when setting up a children’s depot. Fixed-term deposits are also an option for parents and relatives who do not want to take any risks when saving for children up to the age of 18. If you unlock this test, you will find a table with 19 fixed deposit offers for minors (as of September 26, 2022).
Tip: The offers are currently becoming more and more profitable. It is therefore worth taking a look at our fixed-term deposit interest rate comparison (subject to a fee), which we update regularly. It shows fixed-term deposit offers with maturities of between one month and ten years. With one click you can find out which offers are available for minors.
The money belongs to the child
Investing money for children is subject to certain rules. The most important: Money that is invested in the child’s name belongs to the child! Although the parents manage it, they are not allowed to use it for themselves – they save on taxes in return. Once the child turns 18, they can do whatever they want with the money. The parents then no longer have access.
Children’s depots in comparison
Those who opt for a mixture of fixed-term deposits and ETF (funds) can be happy: Most of the 19 banks in our study that offer custody accounts for minors do not charge anything for this. Anyone who invests money regularly, however, has to reckon with purchase fees for ETF savings plans, which for our model case – monthly savings rate 50 euros – are between 1.20 and 33 euros per year depending on the provider. But it also works without it: With three providers in the test, neither a depot price nor a transaction fee is charged. Our savings plan finder shows which provider you can save on which ETF.
From 1 euro the whole world
Around 2,000 different ETFs are traded on German stock exchanges, and many of these are also available as savings plans. However, by no means all of them are suitable for long-term savings or even for old-age provision. For this purpose, we only recommend ETFs that reflect a broad international stock index. Savings plans on world stock indices such as the MSCI World or stock indices on Europe are best suited. With as little as 1 to 50 euros per month, savers can participate in the MSCI World stock index, for example, and thus indirectly in around 1,500 global companies.
The percentage composition of this and all other stock indices shifts constantly with the price development of the securities contained in them. The indices are also constantly being adjusted, with some stocks dropping out and others being added.
Test results for 19 custody accounts for minors
The broad distribution of the savings amount across many companies from different countries and sectors makes the ETF savings plan an easy-to-maintain long-term investment. In contrast to actively managed funds, regular monitoring is not necessary. If you are not extremely skeptical about the long-term development of the stock market, you are right with a savings plan on a global stock index.