Before You Start
- Confirm your country’s rules on opening a custody account (“Junior Depot”, “Compte-titres enfant”, etc.) for minors.
- Have your child’s identification documents (passport or ID card) and your own ready.
- Understand your family’s tax situation regarding investment income for minors.
- Choose a European broker that allows custodial accounts for children (see Step 2).
- Decide on a monthly investment amount in EUR (as little as €25/month is common in 2026).
Time needed: 1–2 hours initial setup, then 10 minutes per month to monitor.
What you'll need: Internet access, legal documents, proof of address, bank account, access to a European brokerage supporting custodial accounts.
Building wealth for your children through ETF investing is one of the most efficient ways to harness compounding and teach lifelong financial skills. This tutorial will guide you step by step through ETF investing for kids in Europe in 2026: from opening a custody account to choosing the right ETFs, managing tax, and maximizing growth. All examples use EUR and are tailored for European-accessible platforms.
Step 1: Open a Custody Account for Your Child
What to do: Open a brokerage account in your child’s name, managed by you as the legal guardian. In Europe, this is typically called a “Junior Depot” (Germany), “Compte-titres enfant” (France), or “Custody Account for Minors” (various countries).
- Germany: Trade Republic, Comdirect, and ING offer Junior Depots.
- France: Boursorama and Fortuneo provide child custody accounts.
- Pan-European: DEGIRO (Netherlands) may allow accounts for minors, subject to local regulation. Check their official help page for eligibility.
Why it matters: Legally, children cannot own investment accounts directly. A custody account ensures assets are in the child’s name but controlled by a guardian until adulthood (usually 18). This can offer tax advantages and protect the child’s future assets.
What can go wrong: Some brokers do not support custodial accounts or may require in-person verification. Missing documents (proof of address, birth certificate) can delay setup. Tax rules differ by country—review them carefully.
For a full breakdown of the process in your country, see How to Open a Custody Account for Your Child: Tax-Advantaged EUR Investing in 2026.
Pro Tip
Choose a broker that allows you to set up automated monthly ETF savings plans in the child’s account. This increases discipline and makes compounding effortless.
Step 2: Understand Tax Treatment for Kids’ Investment Accounts
What to do: Learn how investment income in your child’s account is taxed in your country. Most European countries offer annual allowances for minors, but rules vary:
- Germany: €1,200/year (2026) tax-free capital gains for children.
- France: Taxation similar to adults, but first €1,000 of dividends/capital gains is tax-free for minors (2026).
- Netherlands: Wealth tax applies above €57,000 (2026) across family assets, including children’s accounts.
Why it matters: Exceeding tax-free thresholds may require you to file a tax return on your child’s behalf and pay capital gains/dividend tax. Understanding this helps you optimize your investment amount and avoid surprises.
What can go wrong: Investing too much too quickly can result in tax liability. Some parents mistakenly assume all gains are tax-free for children—always check the latest rules.
Pro Tip
Use accumulating (capitalizing) ETFs to minimize annual dividend payouts and simplify tax reporting, especially if your country taxes dividends annually.
Step 3: Choose the Best ETF Types for Children’s Accounts
What to do: Select broad, low-cost, EUR-denominated (or EUR-hedged) accumulating ETFs suitable for long-term growth. The most popular choices in Europe for 2026 are:
- Global Equity ETFs:
- All-World ETFs:
- Vanguard FTSE All-World UCITS ETF (VWCE, ISIN: IE00BK5BQT80) – includes developed and emerging markets.
- EUR-Hedged ETFs:
- Xtrackers MSCI World UCITS ETF 1C EUR Hedged (ISIN: IE00BGHQ0G80) – reduces currency risk for EUR-based investors.
Why it matters: Simple, diversified ETFs reduce risk and require less maintenance. Accumulating ETFs (that reinvest dividends) are tax-efficient and maximize compounding, especially over 10–18 years.
What can go wrong: Choosing niche, synthetic, or distributing ETFs may complicate taxes or increase costs. Always check the ETF’s total expense ratio (TER)—aim for below 0.25% for core holdings.
Pro Tip
Compare ETF options on JustETF by filtering for “accumulating”, “EUR-denominated”, and “UCITS compliant”.
Step 4: Set Up an Automated ETF Savings Plan
What to do: Configure an automated monthly investment (e.g., €50/month) into your chosen ETF(s) via the broker’s “Savings Plan” or “Sparplan” feature.
- Trade Republic (Germany, Austria): In the app, tap Portfolio → Savings Plan → Select ETF, enter the amount (min. €10), and set the monthly schedule. Confirm with a TAN code.
- DEGIRO: Use their ETF Core Selection for commission-free monthly purchases. In your child’s account, search for the ETF, click “Buy”, and set up a recurring transfer from your bank for the desired amount.
- Boursorama (France): Go to Compte-titres enfant → Plan d’investissement programmé, select your ETF, and set frequency and amount.
Why it matters: Automatic investing removes emotion and ensures your child’s portfolio grows steadily. It also teaches kids the value of regular saving and investing.
What can go wrong: Forgetting to fund the linked bank account can cause missed purchases. Some brokers may not support fractional ETF shares—check before starting with small amounts.
Pro Tip
Start with a low amount (e.g., €25/month) and increase over time. Even €25/month compounded at 6% over 18 years could grow to over €9,000—demonstrating the power of early investing to your child.
Step 5: Track Performance and Involve Your Child
What to do: Review the account’s performance with your child every few months. Show them how their money grows, explain compounding, and discuss why markets go up and down.
- Use the broker’s app or web dashboard to show your child the current value, gains, and history.
- Calculate together: “We invested €1,200 so far, and it’s now worth €1,350. That’s a gain of €150, or 12.5%.”
- Set a goal (e.g., “Let’s reach €5,000 by your 12th birthday”).
Why it matters: Involving your child builds financial literacy and emotional resilience. They learn that investing is a long-term game, not a get-rich-quick scheme.
What can go wrong: Ignoring the account can lead to missed opportunities (e.g., adjusting the plan, rebalancing if needed, or updating bank details). Overreacting to short-term losses can scare kids away from investing.
Pro Tip
Use visual tools like charts or the “history” tab in your broker’s app to make growth tangible for your child. Celebrate milestones, not just returns.
Common Mistakes to Avoid
- Using your own account instead of a custody account: This can trigger higher taxes and legal complications. Always use a dedicated child account.
- Ignoring tax thresholds: Exceeding allowances can create unexpected tax bills. Track annual investment income.
- Picking high-fee or niche ETFs: Stick to broad, low-cost, accumulating ETFs for best results.
- Setting and forgetting: While automation is powerful, review the account yearly to adjust contributions or rebalance as your child’s needs change.
- Not discussing investments with your child: Missed opportunity for lifelong learning and financial confidence.
Next Steps
- Open a custody account for your child following the step-by-step guide above.
- Set up an automated ETF savings plan with a realistic monthly amount.
- Review your country’s tax rules for minors and keep good records.
- Involve your child in tracking growth, setting goals, and understanding the basics of investing.
- For more details on global ETF options, see our guides on IWDA vs. CSPX and the CSPX ETF for European investors.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always do your own research and consider consulting a qualified financial advisor before making investment decisions.