Before You Start
- Confirm you have legal authority to manage investments for the child (as parent or legal guardian).
- Collect official ID and proof of address for both yourself and the child.
- Research which brokers in your country offer custodial or junior accounts.
- Understand your local tax rules for minors’ investment income.
- Decide on your monthly or annual investment amount (e.g., €50/month).
Time needed: 2–4 hours initial setup, 15 minutes/month ongoing
What you'll need: Smartphone or computer, bank account, access to your chosen broker (e.g., Trade Republic, DEGIRO, BUX Zero)
Setting up an investment for children Europe is one of the best ways to give a child long-term financial security. As a parent or guardian, you can leverage compound interest and growth markets — but only if you set up the right account, understand the legal and tax implications, and choose funds wisely. This guide walks you step-by-step through custody, tax, and fund selection for Germany, France, and the Netherlands, using real European platforms.
For a broader understanding of European investing and tax strategies, see our 2026 European Investing Encyclopedia.
Step 1: Choose the Right Legal Structure (Custodial, Junior, or Joint Account)
What to do: Decide how the investment account will be set up legally. In most European countries, you can open:
- Custodial (Junior) Account: The child is the beneficial owner, but you manage the account until adulthood.
- Joint Account: Both you and the child have legal rights (less common for minors, varies by country).
- Your Own Account, "Ear-Marked": You invest in your name and later gift the assets (not always tax-efficient, less protection for the child).
Why it matters: The choice affects taxes, control, and when the child can access the money.
Country Examples:
- Germany: Most brokers offer a Junior Depot (custodial account). Requires both parent and child documents.
- France: Look for Compte-titres pour mineur (minor’s securities account). Available at major banks and some brokers.
- Netherlands: Many banks and brokers offer a Beleggingsrekening op naam van het kind (investment account in child’s name).
What can go wrong: Some brokers don’t support minor accounts, or require in-person verification. If you use your own account, gifts may trigger taxes or legal disputes.
Pro Tip
Always use a custodial/junior account if available. This ensures tax efficiency and legal clarity for the child’s assets.
Step 2: Select a Broker or Platform That Supports Child Accounts
What to do: Choose a broker that (a) operates in your country, (b) offers custodial/junior accounts, and (c) allows low-cost EUR investing.
- Germany: Trade Republic (Junior Depot, from 2024), comdirect, ING Germany
- France: Boursorama, Fortuneo (both offer minor accounts)
- Netherlands: DEGIRO (junior accounts), ABN AMRO
Why it matters: Not all brokers offer low-fee EUR-denominated investing for minors. Fees, fund access, and usability vary.
What can go wrong: Some platforms require both parents’ consent. Others (like BUX Zero) may not offer minor accounts at all. Always check documentation requirements before starting.
How to open an account (example: Trade Republic Germany):
- Go to traderepublic.com and select "Junior Depot".
- Upload your ID and the child’s birth certificate or ID.
- Complete the online verification (video or document upload).
- Link your bank account for deposits.
- Wait for account approval (1–3 days).
Expected outcome: You should receive a confirmation email and see the new junior account in your dashboard.
Pro Tip
Choose a broker with free or low-cost ETF savings plans. This minimizes costs over many years of compounding.
Step 3: Understand Tax Implications for Minors (Germany, France, Netherlands)
What to do: Learn how investment income (dividends, interest, capital gains) is taxed for minors in your country.
| Country | Tax-Free Allowance (2026) | Tax Rate Above Allowance | Notes |
|---|---|---|---|
| Germany | €1,200/year (Sparer-Pauschbetrag for children) | 26.375% (Abgeltungsteuer + Soli) | File exemption form (Freistellungsauftrag) for each child’s account |
| France | €1,000/year (dividends/capital gains) | 12.8% flat tax + 17.2% social charges | Declare in parent’s tax return unless child files separately |
| Netherlands | €57,000 (Box 3 assets per household incl. children) | Progressive (Box 3 wealth tax) | Child’s assets are added to parent’s Box 3 until 18 |
Why it matters: Not understanding the tax rules can result in surprise tax bills, penalties, or missed allowances.
What can go wrong: Failing to file exemption forms means automatic withholding tax. In the Netherlands, large gifts or assets above the Box 3 threshold can affect your own tax bill.
Pro Tip
Set a calendar reminder to file your annual exemption (Freistellungsauftrag in Germany) or report investment income. Tax rules can change, so check annually.
Step 4: Pick the Best Long-Term EUR Funds or ETFs for Children
What to do: Select EUR-denominated, accumulating (reinvesting) ETFs or index funds with global diversification and low fees. These are ideal for long-term compounding and require minimal management.
- MSCI World ETFs: e.g., iShares Core MSCI World UCITS ETF (Acc) – IE00B4L5Y983
- All-World ETFs: e.g., Vanguard FTSE All-World UCITS ETF (Acc) – IE00BK5BQT80
- EURO STOXX 50 ETFs: For regional exposure (example: Lyxor EURO STOXX 50 (DR) UCITS ETF Acc – LU0380865021)
- Sustainable/ESG options: Look for "ESG" or "SRI" labels if you prefer ethical investing.
Why it matters: Accumulating ETFs avoid annual tax paperwork for dividends and maximize compounding. Low fees (TER <0.25%) mean more money stays invested.
What can go wrong: Choosing distributing (payout) ETFs creates extra tax and paperwork. High-fee funds erode long-term returns.
Example: Investing €50/month in the iShares Core MSCI World UCITS ETF (Acc) at 7% average annual return over 18 years could grow to ~€21,000, assuming no withdrawals and fees of 0.20%/year.
Pro Tip
Use fractional shares to fully invest your monthly amount, even if the ETF price is above €50. See our tutorial: How to Use Fractional Shares on DEGIRO and Trade Republic.
Step 5: Set Up and Automate Monthly Investments
What to do: Create an automatic savings plan (Sparplan/Plan d’investissement/Beleggingsplan) on your broker to invest a fixed amount each month in your chosen ETF or fund.
- Trade Republic: Tap "Portfolio" → "Savings Plan" → "Create Plan" → Select ETF → Enter amount (e.g., €50/month) → Choose execution date → Confirm.
- DEGIRO: As of 2026, DEGIRO does not offer automated plans, but you can set a recurring bank transfer and manually buy ETFs monthly.
- Boursorama (France): Go to "Épargne" → "Plans d’investissement programmés" → Select fund/ETF → Enter amount/schedule → Confirm.
Why it matters: Automation enforces discipline, avoids market timing mistakes, and ensures steady compounding.
What can go wrong: Missing a monthly contribution reduces compounding power. Manual investing is prone to procrastination.
Expected outcome: You should see monthly ETF purchases in the account history, with units added automatically.
Pro Tip
Increase the monthly amount as your financial situation improves. Even €10/month extra can add thousands over 18 years.
Step 6: Track, Rebalance, and Prepare for the Child’s 18th Birthday
What to do: Use a portfolio tracking app (best options here) to monitor progress. Review asset allocation every 1–2 years. As the child nears adulthood, prepare documents to transfer control.
Why it matters: Tracking helps you spot errors or missed payments. Rebalancing maintains your desired risk level. Each country has formal steps to transfer account control at 18.
What can go wrong: Neglecting paperwork can delay access. Unmonitored portfolios may drift from your original strategy.
Expected outcome: At 18, the child can assume legal control after submitting ID and any required forms to the broker.
Pro Tip
Review the account together with the child starting age 16. This builds financial literacy and smoother handover.
Common Mistakes
- Opening the account in your own name, then facing gift taxes or disputes at transfer.
- Forgetting to file annual tax exemptions (e.g., Freistellungsauftrag in Germany).
- Choosing distributing ETFs, creating extra paperwork and tax drag.
- Ignoring broker fees or inactivity charges that eat into returns.
- Failing to automate investments, leading to missed months and lost compounding.
- Neglecting to update the broker when you move or change contact details.
Next Steps
- Deepen your understanding of compounding: All About Compound Interest.
- Explore more on European investing, tax rules, and platform reviews in our European Investing Encyclopedia.
- Set a yearly reminder to review the portfolio and tax allowances.
- Start teaching your child about investing basics early – it’s a gift that compounds too.
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.