Most parents are concerned about their children's financial future. After all, they not only want to pass on values and education to them, but also create a solid financial basis - be it for their studies, training or their first home. But how can you invest money for children in such a way that it not only grows safely but also profitably?
The savings account used to be the first choice: parents or grandparents regularly put money aside to give their child a good start in life. Nowadays, however, the classic savings account has had its day: interest rates are so low that savings often even lose value due to inflation. Many people are therefore looking for better alternatives to create a long-term financial basis for their children.
One option that is becoming increasingly popular is so-called children's savings plans. These allow parents to invest money over a longer period of time without having to actively manage their money all the time. ETF savings plans for children are a particularly interesting option, as they can offer attractive long-term returns. But how exactly does this type of investment work? What alternatives are there and what should parents look out for?
In this article, you'll find out which savings options really make sense for children, how you can make the most of the compound interest effect for your child and why investing with Invest4Kids is a particularly clever solution.
We'll help you find the right investment for your child!
What savings opportunities are there for children?
The choice of savings plans for children is huge and confusing - and not every solution is equally good. While some parents continue to rely on savings accounts, others already rely on higher-yielding alternatives such as ETF savings plans. Let's first take a look at the most common options:
1. savings book - the old-fashioned version
🔹 Advantage: Safe, flexibly available
🔹 Disadvantage: Little or no interest, loss of value due to inflation
The savings book has long been considered a classic investment for children. It is safe, easy to manage and the money is available at any time. However, due to the extremely low interest rates, this form of investment is hardly worthwhile anymore - in the long term, savings even lose value.
2. call money account - flexible, but hardly any return
🔹 Advantage: Better interest rate than a savings account, available at any time
🔹 Disadvantage: Interest rates are often variable, low returns
A call money account offers slightly more interest than a savings account, but still falls far short of the returns that can be achieved with an ETF savings plan for children or a tax-optimized insurance solution. It may be an option for short-term reserves - but not for long-term wealth accumulation.
3. building society savings contract - useful for later real estate plans
🔹 Advantage: State subsidy possible, long-term planning
🔹 Disadvantage: Inflexible, often lower returns than ETF savings plans
A home savings contract can be worthwhile if it is clear that the child wants to invest in an apartment or house later on. However, this form of savings is quite inflexible and usually offers lower returns than alternative savings plans for children.
4. ETF savings plan - high long-term return opportunities
🔹 Advantage: Attractive returns, long-term asset accumulation
🔹 Disadvantage: Fluctuations in value, capital losses possible in the short term
An ETF savings plan for children is a modern way of saving for your offspring in a targeted and long-term manner. Attractive returns can be achieved through broad diversification in stock markets - however, there are also fluctuations that can lead to short-term losses in value.
5 Invest4Kids - the smart alternative with full control
🔹 Advantage: Parents retain the right to control the capital
🔹 Advantage: No hidden costs, tax advantages, customizable
Invest4Kids does not actually offer parents a classic children's savings plan, but a tax-optimized insurance solution that works like a children's savings plan - but with decisive advantages. An investment made with Invest4Kids combines the advantages of a classic ETF savings plan with an additional security component: parents retain control over the invested capital, even when the child comes of age. They also benefit from tax advantages and a flexible structure that can be adapted to their life situation at any time.
The compound interest effect: why time is the most important factor when saving
One of the biggest advantages of starting to save early is the so-called compound interest effect. This principle ensures that even small savings amounts can grow into considerable sums over a long period of time - provided that the money is invested regularly and the returns are reinvested.
How does the compound interest effect work?
Put simply, the earlier parents start saving for their children, the more the capital benefits from growth. The income from the investment is not paid out, but automatically reinvested, which means it continues to grow.
🔹 Sample calculation:
Let's assume that parents invest 100 euros every month for their child from birth in a child savings plan with an average annual return of 6 %.
- After 10 years: approx. 16,500 euros
- After 18 years: approx. 38,000 euros
- After 25 years: approx. 72,000 euros
The highlight: the longer the money remains invested, the greater the compound interest effect. A later start can no longer fully compensate for this advantage. That's why it pays to start early!
ETF savings plans for children in particular make optimum use of the compound interest effect, as they invest in the stock market in a broadly diversified manner. But there is a problem: as soon as the child turns 18, parents no longer have any influence over the capital. It is therefore important to choose a form of savings where they can also have a say in the long-term decisions - for example with the Invest4Kids investment concept.
Setting the right savings target: How much money does a child really need later on?
The question is on many parents' minds: How much should I save each month for my child? The answer depends on the individual savings goals. Should the savings later be used for studies, their first home or a driver's license?
We offer you some guide values that show you what sums can make sense in the long term:
| Savings target | Amount required |
|---|---|
| Driver's license | 2.000-3.000 € |
| Study/training | 10.000-20.000 € |
| First own apartment | 10.000-30.000 € |
| Start-up capital for later | 50.000 € + |
What savings rate is realistic?
The good news is that parents do not have to pay in large sums immediately to achieve these goals. Even small amounts grow considerably over time - as long as they are invested wisely.
🔹 Example:
- 50 euros per month over 18 years → approx. 19,000 euros
- 100 euros per month over 18 years → approx. 38,000 euros
- 200 euros per month over 18 years → approx. 76,000 euros
Saving for children: use the child benefit!
Many parents use child benefit for current expenses - but it can be worth investing some of it for the long term. Just 100 euros per month from child benefit can build up a considerable sum. 💡 Tip: You can find out more about this in our article Investing child benefit.
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 savings plan or investing with Invest4Kids: what's the difference?
An ETF savings plan for children is a solid choice - but we have an insider tip for you: there is an even better alternative! In contrast to traditional ETF investments, the Invest4Kids investment concept offers a decisive advantage that many parents often overlook without professional advice: You retain control over the capital - even after your child's 18th birthday.
A classic ETF savings plan is usually opened in the child's name. This means that as soon as the child turns 18, they can freely dispose of all their savings. The parents then no longer have any influence over what happens to the money. A carefully planned savings goal for studies or a home of their own can then quickly flow into spontaneous purchases.
A children's savings plan with Invest4Kids solves this problem. Here, the parents retain the right of control, even after the child reaches the age of majority. This means that you can ensure that the money saved is used for sensible purposes, such as training, studies or a driving license. At the same time, you benefit from tax advantages, flexible savings rates and a professional, personal contact person who will tailor the investment to your family's needs. So why only save when you can invest wisely?
The advantages of the Invest4Kids children's savings plan at a glance
- Tax advantages: The income can be reinvested tax-free.
- Flexibility: The savings rate can be adjusted or paused at any time.
- No unwanted expenses: Parents retain control of the capital until the child is financially independent.
How does the Invest4Kids children's savings plan work?
The Invest4Kids children's savings plan combines the advantages of an ETF savings plan with a parent-controlled and tax-optimized investment.
This is how it works:
- Parents or grandparents set up a children's savings plan.
- The money is invested in a customized mix of funds and ETFs.
- The savings rate can be changed flexibly - depending on your financial situation.
- Parents retain the right to control the capital - even after the 18th birthday.
- The system is professionally maintained and regularly optimized.
By the way: Many grandparents would like to support their grandchildren financially - the Invest4Kids children's savings plan is also a good option here. You can find out more about this in the article Investing money for your grandchildren every month.
FAQ: Frequently asked questions about the children's savings plan
What is a child savings plan?
A children's savings plan is a long-term investment in which parents or grandparents save regularly for their child. The money is invested over a longer period of time - for example in ETFs or funds - and can later be used for education, studies or their first home. Due to the compound interest effect, the savings grow over time, so that even small monthly savings installments can grow into a considerable sum.
What is the difference between an ETF savings plan and a child savings plan?
An ETF savings plan is normally opened in the child's name. This means that the child has unrestricted access to the money from the age of 18. With the Invest4Kids concept, parents retain control so that the capital can be used specifically for sensible purposes.
How much should you save each month for a child?
This depends on the individual savings goal. Many parents invest between 50 and 200 euros per month. Thanks to the compound interest effect, even a small monthly savings installment can develop into a considerable fortune over the years.
Is it safe to invest with Invest4Kids?
Yes, with the Invest4Kids children's savings plan, the money is broadly diversified and invested in ETFs and funds to enable solid long-term growth. What's more, there are no hidden fees or unexpected costs - transparency is our top priority.
Can grandparents or other relatives invest money for the child?
Yes, grandparents can also invest money for their grandchildren each month with a children's savings plan. This is a great way to make sustainable provisions for your child's future.
Conclusion: Start a children's savings plan now and build up long-term assets
Many parents want to give their children the best possible financial foundation for the future. However, traditional savings methods such as a savings book or an overnight deposit account hardly offer any returns - and a child's deposit can become a financial trap by the time they turn 18 if the money is spent carelessly.
A children's savings plan with Invest4Kids offers the ideal solution:
✅ You retain the right to control the capital - even after you reach the age of majority.
✅ Tax advantages ensure that more of your savings is left over.
✅ Flexibly adjustable savings rates that adapt to your family's financial situation.
✅ Professional support and optimized investment strategy for long-term wealth accumulation.
So if you start investing money for your child at an early stage, you can make the most of the compound interest effect and create a financial basis for the big goals in life. If you have any questions or would like individual advice, the experts at Invest4Kids are at your disposal.
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.
