Time deposit for children

Children’s money is worth considering when it comes to providing the children‘s financial security and providing a cushion for the future.

The amount is invested over a fixed term and at a fixed interest rate. This means that a disposal of the balance on the time deposit account is possible only after expiry of the term, in some cases by payment of fees or interest deduction.

Fixed term for minors November 2019

Bank	Interest rate max.	minimum deposit	Runtime in months	application

Renault bank

1.10% 2500 € 12-60 VTB 1.10% 500 € 3 – 120
individual duration possible Mercedes-Benz Bank 0.00% 2500 € 3 – 72 Credit Europe Bank 0.00% 2500 € 12 -120

Considerations for the time deposit for children

Unlike the call money can not be accessed at will to the credit, even an increase in the amount of investment is possible only after the fixed investment period again. The money is thus fixed in the truest sense of the word. In return, the interest income is much higher than the daily allowance, as a fixed interest rate is agreed in advance, which can not change over time. An exception is new fixed interest rates if the bank can offer the customer a better interest rate due to the general market situation. This is usually an option for long term investment accounts over many years. The terms for the child’s term vary from 24 months to several years.

Open deposit account

The principle for opening a deposit account for children is the same as for the daily allowance. The guardians must give their consent for the opening of the account and subscribe. Ownership should, at best, be in the name of the child. After all, it makes sense that the saved amount really benefits the child. Direct banks and branch banks offer a deposit account for children. Anyone who opens such an account online also goes through the PostIdent procedure. For this purpose, parents and children must be identified by presenting the identity card at a post office. If the account is opened for a baby, the birth certificate must be presented.

Interest income and taxes

Interest income is subject to capital gains tax. This is 25% plus solidarity surcharge. However, any investor, including children, if the account is in their name, can save taxes by submitting an exemption order to the bank. For children a tax deduction of 801 Euro per year applies. Interest income in excess of this amount is automatically taxed. The bank retains this withholding tax and transfers it to the tax authorities.

Time deposit for children:
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