Investment for grandchildren and godchildren
The investment for grandchildren and godchildren has always been thoughtful. On savings accounts, the money multiplied by interest and the investment forms Tagesgeld and fixed-term money create more and more incentives for saving.
Although the good old savings account has not yet quite exhausted, but is increasingly displaced by the other options. In particular, the daily allowance proves to be an investment in which grandparents and sponsors can pay in flexibly, relying on security and an attractive return.
Child day allowance in comparison
Some banks offer overnight money accounts for minors. This has the advantage that an exemption order can be issued via the tax-exempt amount of the child.
Here is the money market accounts for children in comparison
Gifts of money with added value
Admittedly, small children still enjoy the large, colorful parcels that grandma, aunt, uncle and other relatives put under the gift table. The bigger the children become, the bigger the wishes become, which is why money gifts have been high on the list for years. But the money is quickly spent again, already one day children and young people find plenty of opportunities. just to bring several hundred euros among the people. It makes more sense to save money in order to be sure of the big wishes like driver’s license and training in the future. Because just for a hefty sums is needed that the parents can not just pull out of his pocket. The investment for grandchildren and godchildren through a daily or time deposit account offers significant added value due to the interest earned.
How the investment works
Grandparents or godparents are closest to the child in the relationship and therefore the thought of opening a savings account for the child is also close. These can be different investment forms. This is possible with the so-called “contract in favor of third parties”, which is concluded at the bank. The beneficiary in this case is the child and the parents must give their consent. The basis of this contract are written conditions that must be fulfilled so that the third party, ie the child, can dispose of the invested amount. There is a difference if the account is set up directly on the child’s name. Then, in addition to the legitimacy of the applicant (grandparents, godparents) to prove the existence of the child by an official document. The disposal can be determined differently. Either the third party or the legal guardian are entitled to dispose of the goods immediately or only after the expiry of a fixed period, e.g. with the coming of age.
Exemption application
When investing for grandchildren and godchildren, the question of taxes also comes up. Interest income is subject to capital gains tax, which is normally automatically deducted by the Bank and paid to the tax authorities if there is no exemption. If the account is in the name of the child, the tax deduction on the interest income of 801 Euro per year can be claimed. For this, the exemption request must be submitted to the bank when the account is opened. In the case of a contract in favor of third parties, the grandparents or godparents remain the holders of the account and must therefore claim their own lump sum. Especially if there are other savings accounts at different banks, a separate exemption application has to be made for each account. All interest earned on existing accounts may not exceed the saver lump sum if they are to remain tax-free.
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