Open a savings account for children?
Many people still know the classic one created by parents passbook. Stored at home, the parents took the book and went to the Sparkasse or Volksbank to deposit money. The savings book provided the first small start-up capital.
At the age of 16 or 18, the children gained access as pupils or trainees and were happy about the first credit. Today we refer to the overnight accounts as a savings account. That is quite legitimate because the Time savings concept the focus is on a child-safe account.
In addition to the savings account as a call money or fixed deposit account, there are other forms of savings with junior deposits, funds, ETFs, building society contracts and training insurance, which we do not all compare here. You can find a good overview of these possible savings options with advantages and disadvantages for each individual form of savings on sparkonto.org in the area of savings for underage children.
Negative interest for everyone?
Even if the press stirs up fears. If so, there will only be negative interest for large balances and not every bank will apply the negative interest rate. At the moment there is still up to 0.50% guaranteed for overnight deposits for 3 months and has good savings offers like Rabobank Spar90. A large number of German investors still prefer the classic savings account in the area of overnight money or fixed deposits when saving for children.
Daily savings account for children
Since the customer always has access to a savings account, the interest rate is not as high as for the fixed-term deposit account for children. The bank itself cannot invest the savings in the long term.
The only difference between a savings account / savings book and overnight money is the limit of available cash for the classic savings account, which is limited to € 2,000 per month. The savings account must be terminated to access higher amounts. The customer only gets the money after a 3-month notice period.
The call money account is the better savings account for children!
Fixed-term savings account for children
If the offspring are still young or even in their infancy, long-term capital accumulation is a good option. A time deposit account with a term of 1-10 years achieves significantly higher interest income than a checking or overnight deposit account for the child. Ownership can only be issued to the child at selected banks.
- Fixed-term deposits secure interest rates for many years without risk – the return is fixed.
- Saving time deposit offers higher interest rates than call money or savings account / savings book.
Save time deposit
Advice and questions
Application and ownership
To apply for ownership directly for the child, a separate declaration or authorization must be completed by the parents. Opening a savings account for children is no problem with the Postident procedure and presentation of ID and original or certified copy of the birth certificate. The parents are one of the account holders or authorized representatives in the savings account contract. Children under the age of 7 are incapable of business, so they do not have access to an account or a cash card with which they can withdraw money. However, they can hold a child’s savings account and thus claim their own tax-free allowance.
A savings account is worthwhile?
There are good arguments for having your child’s own savings account or daily allowance account. A savings account is always a credit account. A minus level is not possible. This is the best option for children, provided they are of limited legal age from 7 years. The focus is on saving. Parents can set up a standing order for daily savings and have an amount X transferred to the account constantly or flexibly on a monthly basis. In order to get young people used to the careful use of money, savings accounts and student accounts are a well worth considering alternative.
What to save for?
- Driving license / car
- Education, teaching, private schools
- Studies, semester abroad
- Establishment of the first apartment
Take advantage of tax benefits!
Investment income from interest is not tax-free. However, if minors are themselves holders of a savings account or overnight allowance account, an exemption order can be submitted. The exemption limit of EUR 801 also applies here. Withholding tax is only payable if interest accrues above this amount.
The interest rates are too low for you?
Unfortunately, savings rates are very low. The ECB, which regulates the level of the key interest rate and thus indirectly also for the level of the savings interest, plans to raise interest rates only at EU inflation rates above 2%, which are also not expected in 2020. What are alternatives?
Is a stock or fund savings plan an alternative to saving for children?
We say: Yes, the legal requirement to choose child-safe savings investments for children does not exclude these high-return investments, even for riskier investments. In order to spread the risk, there are stock and fund savings plans. Is this for children? Yes, at some banks, junior depots can be opened for the children and savings plans can be created for savings of 25 euros or more per month.
Up to € 500 premium until January 31, 2020 with the ETF savings plan OSKAR as an alternative to low interest rates.
The state as a legislator explicitly protects children’s savings investments by prescribing coin-safe savings investments. Share and fund savings plans are not excluded. We recommend spreading the risk with an ETF savings plan for children and not investing in individual stocks. OSKAR is an ETF savings plan for families, recommended by the magazine ELTERN. Read our fact check.
A deposit of up to EUR 500 is possible for deposits made until January 31, 2020.
Read directly to Oskar’s test report
25 euros premium for the Consorsbank fund savings plan:
The Consorsbank has more than 10,000 funds to choose from, many of which have no front-end load. Thematic funds such as in the area of environment and sustainability can be filtered and integrated into the savings plan. Take a look at the performance and decide whether you are willing to take more risk for higher returns than with traditional saving.
- There is a € 20 premium for the first savings plan.
- It is possible for a minor to open using their own saver allowance, deposit management and account management are free of charge
- Over 10,000 funds freely selectable, duration and savings rate can be changed at any time. The money is available at short notice
- Savings rates from 25 euros per month are possible.
- Funds, ETFs, stocks, and ETCs / certificates can be chosen by yourself. We recommend funds for children.
Info Consors savings plan
Our recommendations for classic savings for daily deposits / fixed deposits for children.
Tip 1 – Renault Bank daily allowance
At Renault Bank, the overnight savings account can be with an option for minors be opened. The interest rate is a good 0.45% for new customers and 0.25% interest after the 3-month fixed interest rate. The solid follow-up interest is a big advantage to ING with very meager follow-up interest after the fixed rate. Renault Bank makes fair savings offers for all customers.
- 0.45% savings interest for new customers with guaranteed interest over 3 months
- fair follow-up interest of 0.25%
- safe saving separately from parental assets
- monthly interest credit with compound interest effect
- 100% deposit guarantee up to 100,000 euros / customer (very good bank rating, France is considered safe)
Renault Bank application
Tip 2 – Rabobank savings account and overnight money
At Rabobank, the RaboSpar90 account is a good-interest offer. The application for underage children is possible. In addition to the RaboSpar90ß and RaboSpar45 savings accounts, you can also create credit on a classic overnight deposit account.
- 0.50% savings interest for all customers up to € 500,000
- Attention, termination fee – there is a 90-day lock-up period for an order from the savings amount
- stable deposit insurance up to the sum of 100,000 euros per customer
- same interest for new and existing customers
Comparison of child benefit
Saving time deposits for children.
Tip 1 – VTB Europe
A children’s savings account can also be opened at VTB. Account holders for the well-interest and safe deposit savings account can be minors. The parents have sole power of attorney, which expires when they are of legal age. Until then, the kids cannot have the credit themselves. An investment in VTB can be classified as low-risk because it belongs to the German deposit guarantee scheme. The basis for the savings account is the opening of a call money account. The minimum investment amount, which is low at 500 euros, is very cheap.
The interest rate scale: 07.01.2020
|running time||interest rate|
|1.5 years||% p.a.|
|2 years||0.40% p.a..|
|3 years||0.60% p.a..|
|5 years||0.80% p.a..|
|ten years||1.10% p.a..|
Request a time deposit
Tip 2 – Savings Bank Renault Bank
The French Renault Bank currently has a good fixed deposit savings account for minors. The minimum investment amount is a low 2,500 euros. The interest is credited annually. There is a choice of whether to pay out or reinvest with compound interest. The interest scale of the time deposit account from 07.01.2020
|running time||interest rate|
|1 year||0.50% p.a..|
|2 years||0.70% p.a..|
|3 years||0.85% p.a..|
|4 years||0.90% p.a..|
|5 years||1.00% p.a..|
Request a time deposit
Other savings options for children possible?
On the linked info page you can find out whether alternative green facilities and the classic home savings contract and training savings are also suitable for children.
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