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Mutual Funds for Kids in Germany
Investing in Your Child's Bright Future
Secure Their Tomorrow with Smart Investments Today
Mutual Funds investment for kids in Germany offer a smart and secure way to invest in your child’s future. These funds are designed to grow with your child, providing a balanced portfolio of investments aimed at delivering steady returns over time. With the power of compound interest, these funds are ideal for long-term savings goals like education or other future needs.
Highlights
Potential Annual Returns up to 20% p.a.
Tax Benefits for kids
No inheritance tax
Key Features
- Flexible Withdrawals
Provides the option to withdraw funds to support key stages in your child’s life, like education or home buying.
- Diversified Portfolio
Benefit from a mix of equities, bonds, and other assets to minimize risk and maximize returns.
- Long-Term Growth Potential
Leverage the power of compounding to build a substantial fund for your child's future needs.
Do You Have Any Questions?
Why invest in mutual funds for kids?
Investing early in mutual funds can help grow your savings through compounding, providing a head start for your child’s future financial needs.
How can I invest in mutual funds for my child?
You can open an account in your child’s name or a custodial account at banks, financial institutions, or online platforms that offer kids’ investment plans.
What types of mutual funds are suitable for kids?
Equity funds, balanced funds, and child-specific funds that focus on long-term growth with manageable risk are commonly recommended for kids.
What is a Junior Depot?
A Junior Depot is a custodial account specifically designed for minors, allowing parents to invest in mutual funds, ETFs, or stocks for their child’s future.
Is there a minimum investment amount for kids' mutual funds?
Minimum investment amounts vary, but many savings plans (Sparplan) for kids start as low as €25 per month, making it accessible for families.
Are returns from kids' mutual funds taxed?
Yes, returns are subject to tax, but there are allowances for children. Income up to a certain amount may be tax-free, depending on the account setup.
Can the money in kids' mutual funds be accessed before they turn 18?
Generally, funds are locked until the child turns 18, but parents can access funds early for the child’s benefit, subject to terms set by the account provider.
What happens to the mutual fund when the child turns 18?
When the child turns 18, control of the account typically transfers to them, allowing them to decide how to use or continue investing the funds.
Are mutual funds better than savings accounts for kids?
Mutual funds generally offer higher potential returns compared to traditional savings accounts, which are ideal for long-term goals despite higher risk.
Can family members contribute to the child’s mutual fund?
Yes, grandparents and other family members can contribute, making it a popular gift option for birthdays or special occasions.
What is the difference between a child savings account and a mutual fund?
A child savings account offers low risk but low returns, while mutual funds carry higher risk but offer the potential for significant growth over time.
Are there any government incentives for investing in kids’ mutual funds?
There are no specific incentives for mutual funds, but tax allowances for children’s income can help reduce the tax burden on investment returns.
Can I invest in ESG or sustainable funds for my child?
Yes, many providers offer ESG or sustainable funds, allowing you to invest in line with values that prioritize environmental and social responsibility.
What happens if I stop contributing to my child’s mutual fund?
The investment will continue to grow or fluctuate based on market performance. You can resume contributions when financially comfortable.