Before You Start
- Basic understanding of ETFs and investment risk
- Legal residency in a European Economic Area (EEA) country
- Access to a European brokerage (e.g., Trade Republic, DEGIRO)
- Your child’s birth certificate and identification documents (for account opening)
- Awareness of your country’s tax rules for minors
Time needed: 1–2 hours to open accounts and set up the first investment, 10 minutes/month for ongoing contributions
What you'll need: Your ID, your child’s ID, proof of address, a European bank account, a smartphone or computer
Building a kids investment portfolio in Europe is a powerful way to give your child a financial head start. Thanks to low-cost, diversified UCITS ETFs, European parents can now invest for their children efficiently, with tax advantages and full EUR exposure. This guide walks you through each step, using real brokers (Trade Republic, DEGIRO) and real ETF examples (VWCE, IWDA, Euro Stoxx 50), so you can set up a compliant, future-proof portfolio for your child.
Step 1: Choose the Right Account Type for Your Child
What to do: Decide whether to open a custodial (junior) account in your child’s name, or to invest via your own account with a separate sub-portfolio earmarked for your child.
- Custodial/Junior Account: Legally belongs to the child. Available at DEGIRO, Trade Republic (Germany only), and some local banks (e.g., ING in the Netherlands, BNP Paribas in France).
- Parent’s Account with earmarked funds: Assets are legally yours. You’ll need to transfer assets or cash to your child when they reach adulthood.
Why it matters: Custodial accounts ensure the money is truly your child’s and may offer tax advantages (e.g., annual gift allowances, lower capital gains rates for minors in some countries). However, once your child turns 18 (or the local age of majority), they gain full control—no exceptions. If you invest via your own account, you retain control but may face gift or inheritance taxes later.
What can go wrong: Some brokers don’t offer junior accounts in all countries. Investing via your own account risks commingling funds and unclear ownership. Always check local rules on gifts and account types.
Step 2: Select a European Broker That Supports Kids’ Accounts
What to do: Register with a broker that offers junior/custodial accounts for residents of your country. Two accessible options:
- DEGIRO: Offers child accounts in many EU countries. Process: Complete online registration, submit KYC documents for both parent and child, and provide the child’s birth certificate.
- Trade Republic: As of 2024, offers junior accounts only in Germany. Sign up via the app, select “Kinderdepot” during onboarding, and upload required documents.
Why it matters: Using a regulated, reputable broker ensures safety of funds and compliance with European investor protection rules. UCITS ETFs are mandatory for EU investors due to PRIIPs regulation.
What can go wrong: Not all brokers offer junior accounts. Some banks charge high custody fees. If your chosen broker doesn’t support kids’ accounts, consider whether you’re comfortable using your own account and tracking earmarked funds separately.
Pro Tip
DEGIRO’s junior account lets you control the portfolio until your child turns 18, after which they gain full access. Keep documentation of all contributions for future reference.
Step 3: Pick the Right UCITS ETFs for a Kids Investment Portfolio
What to do: Select globally diversified, EUR-denominated UCITS ETFs suitable for long-term growth.
- Vanguard FTSE All-World UCITS ETF (VWCE): ISIN IE00BK5BQT80. Covers 3,500+ stocks globally. Accumulating, EUR-denominated, listed on Xetra, Euronext.
- iShares Core MSCI World UCITS ETF (IWDA): ISIN IE00B4L5Y983. Developed markets only, accumulating, EUR listing available.
- iShares Core EURO STOXX 50 UCITS ETF (EUN2): ISIN DE0005933956. Focused on Eurozone blue chips. Accumulating, EUR-denominated.
For most parents, a single global ETF like VWCE is sufficient for maximum diversification. If you prefer to add a European tilt or want to teach about regional investing, consider combining VWCE (80%) and EUN2 (20%) in your child’s portfolio.
Why it matters: UCITS ETFs are compliant with EU investor protection rules and are tax-efficient for European investors. Accumulating share classes (which automatically reinvest dividends) simplify tax reporting and compounding.
What can go wrong: Avoid non-UCITS ETFs, as they’re not available to EU retail investors. Check for accumulating (not distributing) share classes to avoid annual dividend paperwork. Confirm the ETF is listed in EUR to avoid unnecessary currency conversion fees.
Pro Tip
Use VWCE for global exposure and simplify future rebalancing. For more on building a resilient ETF allocation, see How to Build a Defensive ETF Portfolio for European Investors Nearing Retirement.
Step 4: Set Up the Investment (with Screenshots for Trade Republic & DEGIRO)
What to do:
- In Trade Republic: Tap Portfolio → Savings Plan → Search ETF. Enter "VWCE" or your chosen ETF’s ISIN. Set the monthly investment amount (e.g., €50). Choose execution date and confirm. You’ll see a confirmation screen; your first purchase will execute on the selected date.
- In DEGIRO: Log in, go to Products → ETFs. Search for "VWCE" or your ETF’s ISIN. Click "Buy", enter the investment amount (e.g., €100), select “Market Order” for instant purchase or “Limit Order” for price control. Confirm the order. For regular investments, set a calendar reminder to repeat this monthly (DEGIRO does not offer automated savings plans as of 2024).
Expected outcome: You should now see your first ETF purchase confirmed in your child’s account, with a value of approximately €50–€100 depending on your order. In Trade Republic, the savings plan will execute automatically each month; in DEGIRO, you’ll need to repeat the process manually (or use third-party automation tools where allowed).
Why it matters: Consistent investing (monthly or quarterly) smooths out market volatility and builds wealth over time. Savings plans automate the process, ensuring you don’t forget or try to time the market.
What can go wrong: In DEGIRO, forgetting to invest regularly can lead to missed growth. In Trade Republic, ensure your bank account is funded on the execution date. Double-check that you’re buying the accumulating share class and that the ETF is EUR-listed.
Step 5: Understand Custody, Tax, and Transfer Rules
What to do: Familiarize yourself with the tax rules for minors in your country, and what happens when your child turns 18.
- Custody: In a junior account, assets are legally the child’s. As the parent, you act as the legal representative until adulthood.
- Tax: In most EU countries, kids have their own tax-free allowance for capital gains/dividends. For example, in Germany, children get the same €1,000 capital gains tax-free allowance as adults. In the Netherlands, assets in a child’s name may count towards parental wealth tax.
- Transfer at adulthood: At 18 (or your local age of majority), control transfers to the child. You cannot block withdrawals or direct investments after this point.
Why it matters: Understanding these rules prevents unpleasant surprises and helps you optimize for taxes and control.
What can go wrong: If you invest via your own account, transferring assets to your child later may trigger gift taxes. If you misunderstand tax allowances, you could underreport or overpay taxes. Always keep transaction records and consult your local tax authority or a qualified advisor.
Pro Tip
If your country taxes unrealized gains (as in the Netherlands), consider using accumulating ETFs to minimize cash flows and reporting complexity.
Step 6: Set Up Regular Contributions and Review Annually
What to do: Decide on a regular monthly or quarterly contribution amount. In Trade Republic, automate this via the savings plan. In DEGIRO, set a recurring calendar reminder to buy your chosen ETF on a set date each month.
Example: Investing €50/month for 18 years at a 6% average annual return could grow to over €17,500 by the time your child turns 18 (total contributions: €10,800).
Why it matters: Regular contributions harness the power of compounding, and reviewing the portfolio annually lets you adjust as your child gets older or your financial situation changes.
What can go wrong: Skipping contributions or forgetting to review asset allocation as your child nears adulthood (when you might want to reduce risk) can undermine your goals. Always document each contribution and keep statements for future reference.
Pro Tip
Set an annual calendar reminder to review your child’s portfolio. As they approach age 16–18, consider shifting a portion to less-volatile assets if the funds will soon be needed.
Common Mistakes When Building a Kids Investment Portfolio in Europe
- Using non-UCITS ETFs, which are not accessible to EU retail investors
- Forgetting to use accumulating share classes, resulting in unnecessary tax paperwork
- Not automating contributions (missing out on compounding)
- Mixing your child’s funds with your own, leading to unclear ownership and tax issues
- Not understanding when control of the account transfers to the child
- Neglecting to check for annual account or custody fees
- Ignoring local tax rules for minors
Next Steps
- Open a junior/custodial account with a European broker that supports kids’ portfolios
- Select a globally diversified UCITS ETF (e.g., VWCE) and set up a regular savings plan
- Document all contributions and keep statements for tax and transfer purposes
- Review the portfolio annually and adjust as your child nears adulthood
- If you’re interested in sustainable investing, see Best ESG UCITS ETFs for 2026: Top Sustainable Choices for European Investors
- For tips on rebalancing, see How to Rebalance Your All-World ETF Portfolio for Long-Term Growth—Step-by-Step EUR Example
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.