What remains of a gift once the joy of unwrapping it has passed? Toys often quickly end up in a corner, vouchers are forgotten and cash is rarely invested wisely. If you want to give your child, grandchild or another loved one something with real value, the gift of shares or ETFs can be a clever alternative. Because with a gift of securities, you're not just giving money - you're laying the foundations for financial knowledge, wealth accumulation and future prospects.
More and more parents are discovering the possibilities of investing money for children, be it for Christmas, a first day at school or a birthday. The idea behind it: Share gifts grow with you - over the years, adapted to your child's life situation.
In this article, we show you what you need to consider when you want to give shares as a gift - from the selection and custody account to topics such as taxes, custody account transfers and gift tax. With clear tips, understandable examples and a concept that will support you as a parent in the long term.
We'll help you find the right investment for your child!
Why shares are a valuable gift for children
A new bike, a video game or a voucher for their favorite store - all of these things will put a smile on your child's face at first. But what remains in the long term? If you want to take a more sustainable approach, it's worth taking a look at the world of securities. Because giving shares as a gift means transferring real value - with potential returns, a learning effect and personal significance.
Practice early: financial education right from the start
Anyone who comes into contact with investing at an early age will later understand better how markets, assets and returns work. A gift of securities is not only a smart financial decision, but also an invitation to learn. Whether you explain to your child how a company works or watch the performance of a share price together, it creates a genuine interest in economic relationships.
📌 Tip: Give your child a share in a company they know - e.g. LEGO, Disney or Adidas. This makes the gift tangible and emotionally charged.
Time is yield - and children have a lot of it
A big advantage: children have the most important investment factor on their side - time. Thanks to the compound interest effect, even a small regular deposit can result in a considerable fortune. The earlier you start, the greater the chance of sustainable profits.
✔ Example calculation:
€ 25 per month invested in an ETF, with 6% return p. a. → over 18 years = approx. € 10,000
(without one-off payments or tax optimization!)
A smart move - not just for your child, but for the whole family. Because investing in shares today is a gift for the future with substance.
What you need to bear in mind when giving shares to children
Gifting shares to children is a great sign of foresight - but it is also a legal and organizational process in which you need to consider a few things. After all, it's not just a gift, but an official transfer of assets that involves custody account management, tax issues and the tax office. Sounds complicated? It's not - if you know what's important.
Nothing works without a depot
So that you can give securities as a gift, the child receiving the gift needs their own securities account. A so-called JuniorDepot is usually set up for minors. This is opened and managed by the parents as legal representatives. You as the giver can then transfer shares or ETFs to this securities account.
📌 Important: Grandparents, godparents or friends cannot open a custody account for the child alone - this is reserved for the parents.
This is how the custody account transfer works
Once the custody account has been set up, the actual donation can begin. You order a custody account transfer from your online broker or bank - make sure that you declare this as a "free of charge" (i.e. as a gift). This is the only way to avoid the withholding tax being calculated incorrectly.
✔ Checklist for the gift:
- Open JuniorDepot (by parents)
- Select shares or ETFs
- Mark transfer as a "gift"
- If necessary, inform the tax office about larger gifts
A good idea, but not without rules: With the right preparation, your gift of shares will be a legally secure, personal and future-proof gift - without any stumbling blocks.
Giving is nice - but the tax office is watching
If you want to give shares as a gift, you shouldn't lose sight of the issue of taxes. Even if it's something as personal as a gift for your child or grandchild, the tax office will be interested. But don't worry - with a little know-how, the tax issue won't be a stumbling block, but a plannable part of the asset transfer.
Gift tax? It depends
In Germany, the gift of shares is generally subject to tax. However, the decisive factor is the tax-free amount, which is different for each relationship constellation:
📌 Allowances at a glance:
- Children: up to €400,000 tax-free
- Grandchildren: € 200,000
- Friends & acquaintances: only € 20,000
✔ Tip: These tax-free amounts apply again every 10 years - so you can also make gifts in stages.
If you remain below the tax-free amount, no gift tax is payable. If you exceed it, the excess amount is taxed at a graduated rate - depending on the degree of relationship and the amount of the gift.
Capital gains for children: Who has to pay tax on what?
Capital gains such as dividends or profits from the subsequent sale of shares are also subject to withholding tax (25%). However, children benefit in particular here:
- Annual saver's allowance: € 1,000
- Basic allowance for income: over € 11,000
- ➜ This means that the income often remains tax-free if the child has no other income.
✔ Example: A child receives shares worth €10,000 and earns €400 in dividends each year - completely tax-free with clever planning!
With the right investment strategy and a little planning, you can get the most out of your gift of securities from a tax perspective - and give your child maximum value.
What happens to the custody account when your child comes of age?
If you have set up a securities account for your child, sooner or later a key question will arise: What happens to the securities account when the child comes of age? In traditional junior custody accounts, the answer is clear - on their 18th birthday, the child automatically becomes the sole authorized signatory. This means they can sell, switch or even completely liquidate the securities. Not all parents are comfortable with this idea - especially if a five-figure fortune has been built up.
Prevent "squandering": Are there alternatives?
Financial responsibility is often still a learning process, especially in the sensitive transition phase between school and university or training. This is why many parents are looking for ways to retain influence over financial investments.
📌 O ur tip: With the Invest4Kids concept, the so-called right of determination remains in place even after the 18th birthday. You decide when and how your child receives access to the securities gift - for example, when they turn 21 or 25. But more on that in a moment!
This solution offers maximum flexibility while at the same time protecting against careless disposal - and ensures that your gift retains its value in the long term. Because not every gift should be unwrapped immediately.
We'll help you find the right investment for your child!
- An additional $25,703 per child, thanks to our modern ETF strategy
- Find the perfect ETF investment for your child in a 30-minute video conference from the comfort of your own home.
- Sit back and watch your child's assets grow – our experts will take care of the rest.
ETF or individual shares - which is better as a gift?
If you want to give shares as a gift, sooner or later you will be faced with an important decision: should it be a specific individual share - for example from LEGO, Tesla or Adidas - or would you prefer an ETF that covers the same number of companies? Both have advantages and disadvantages. The good news is that there is no wrong decision - just the question of what suits your child, your goal and your budget better.
Individual shares: Emotional & tangible
A concrete share often has a more tangible effect - especially for children. If your child loves Disney films or is a fan of sports brands, you can arouse enthusiasm and curiosity with a suitable share.
✔ Advantages of individual shares:
- Personal connection to the company
- Ideal for smaller gifts or symbolic occasions
- Good basis for discussion in the family
📌 Tip: Many online brokers even offer shares in paper form or gift certificates - perfect for Christmas or the start of school.
ETFs: Stable & broadly diversified
ETFs (Exchange Traded Funds) are particularly popular for children's investments. They bundle many companies into a single product, thereby reducing risk.
✔ Advantages of ETFs:
- Automatic risk diversification
- Low costs
- Ideal for long-term wealth accumulation
ETFs are also a good choice if you want to save something regularly - for example via a monthly savings plan. This allows your assets to grow bit by bit without constant intervention.
Whether it's a single share or an ETF - your gift counts. And even better: you show your child how securities work and that clever investments can bring real joy.
Emotional component: Designing financial gifts creatively
A gift of shares doesn 't have to be dry or sober - on the contrary: with a little creativity, the gift of securities can be a real highlight that will be remembered for a long time. Children in particular are fascinated by stories and symbolism. So why not combine an investment with a personal moment?
📦 Ideas for creative gifts:
- A Starbucks share together with a cocoa cup
- A technology ETF packaged in a toy robot
- A voucher for a joint "share breakfast" with discussions about money
This makes the system tangible and emotional
Emotional packaging or a small ceremony gives the gift more meaning. Maybe you even keep a little "investment diary" with your child? Or you can sit down together regularly to discuss the deposit. This creates closeness and trust - and makes money a positive topic in the family.
📌 Tip: If you're not sure how to wrap it up, many online brokers can help with personalized gift certificates or templates for securities gifts.
Turn securities into a real experience: A little imagination is all it takes - and an ETF becomes an emotional gift with value that not only grows in your portfolio, but also in your child's heart.
Invest4Kids - The clever solution for parents who want more
If you don't just want to give away a share, but want to make smart long-term provisions for your child, it's worth taking a look at Invest4Kids - the only concept in Germany that specializes exclusively in investing for children. Here you don't get a standard solution, but a tailor-made strategy that is geared towards your child, your life and your plans.
What makes Invest4Kids special
✔ Free, personal advice:
Experts take time for you - regardless of whether you are new to the topic or already have experience with securities.
✔ "Right of determination" from 18:
Your child comes of age, but you remain the master or mistress of the custody account - until you decide the right time to hand it over.
✔ Tax advantages:
No stress when changing strategy, as there is no withholding tax. The income can be reinvested tax-free. And: If your child takes over the custody account later and only pays out after the age of 62, only 50% of the gains are taxable.
✔ Flexibility without hidden costs:
No custody account fees, no transaction costs. You can adjust the savings rate, pause or add one-off amounts at any time.
📣 Parents' voices from everyday life:
"Finally someone who takes our questions seriously and doesn't overwhelm us with technical jargon." - Sabrina (mother of two children)
"It was important to me that my son didn't blow it all at 18. Invest4Kids has a solution for exactly that." - Markus (father of a teenager)
With Invest4Kids, you don't just get a custody account, but a strong partner who shapes the future together with you - secure, flexible and tax-smart. For anyone who wants to give more than just money: a real perspective.
Giving with foresight - now is the right time
A gift of shares is much more than a financial contribution - it is a sign of trust, foresight and genuine care. Whether a single share, ETF or a well-thought-out concept such as Invest4Kids: if you start building up assets for children at an early stage, you are not just giving money, but real opportunities for the future.
You have now learned how you can give securities as a gift, take advantage of tax benefits and support your child in the long term - even beyond their 18th birthday. Use this knowledge to create an investment that is not only secure and flexible, but also emotionally valuable.
🎁 Now it's your turn!
Take the first step and secure a free, personal consultation with Invest4Kids. Together we will find the right solution for your child - individual, transparent and with a real plan for tomorrow.
👉 Arrange a consultation now - because your gift should count.
We'll help you find the right investment for your child!
- An additional $25,703 per child, thanks to our modern ETF strategy
- Find the perfect ETF investment for your child in a 30-minute video conference from the comfort of your own home.
- Sit back and watch your child's assets grow – our experts will take care of the rest.
