How to Open a Custodial Investment Account for Children in Europe

Setting up a custodial investment account in Europe is a practical way for parents and guardians to invest for their children’s future—whether for education, their first car, or to teach them about financial markets. This tutorial guides you through the entire process, step by step, with a focus on EUR-based examples and real European brokers. We’ll also address legal, tax, and documentation requirements, and recommend ETFs suitable for young investors.

Step 1: Understand What a Custodial Investment Account Is (and Why It Matters)

A custodial investment account (sometimes called a “minor account” or “junior account”) is an investment account opened by an adult (the custodian) on behalf of a child (the beneficiary). The custodian manages the investments until the child reaches the age of majority (typically 18, but can be 21 depending on country).

• Why this matters: It legally separates the child’s investments from the parent’s, with ownership and tax consequences for the child.
• What can go wrong: If not set up properly, the account may default to the parent’s name, affecting both taxation and legal rights.

Step 2: Compare European Brokers That Offer Custodial Accounts

Not all brokers in Europe offer custodial/junior accounts. Here are some of the main options available to EU residents:

• DEGIRO (available in most EU countries): Junior accounts for minors under 18, with parent as legal representative. DEGIRO junior account info
• Trade Republic (Germany, Austria, Spain, France, Netherlands, Italy): Junior accounts for children, managed by parents. Trade Republic support
• FlatexDEGIRO (Germany/Austria): Offers “Junior Depot” for minors. Flatex Junior Depot
• BNP Paribas, Boursorama (France): Offer “Compte-titres enfant” for minors.
• Revolut & Wise: Offer junior accounts for banking, but not for investing (as of 2024).

Choose a broker that is licensed in your country and offers EUR-denominated accounts. Check their junior account application process and minimum deposit requirements.

• Why this matters: Some brokers only allow residents of specific EU countries to open junior accounts.
• What can go wrong: Trying to open a custodial account with a broker that doesn’t support them can lead to wasted time and rejected applications.

Step 3: Prepare the Required Documentation (KYC/AML)

European brokers are legally required to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations for both the parent/guardian and the child. You’ll typically need:

• Parent’s/guardian’s valid ID or passport
• Child’s birth certificate and/or valid ID/passport
• Proof of address for both (utility bill, bank statement, or official letter, less than 3 months old)
• Tax Identification Numbers (TIN) for both (mandatory in most EU countries)
• Sometimes: Parent’s marriage certificate or proof of guardianship (if not obvious from birth certificate)

• Why this matters: Incomplete or mismatched documents are the #1 reason for delays or account rejections.
• What can go wrong: Documents that are out of date, blurry, or non-matching (e.g., different addresses) will be rejected, requiring you to resubmit.

Step 4: Start Your Application with the Broker

Let’s walk through a typical process using two popular brokers:

Example: Opening a Junior Account with DEGIRO

1. Go to DEGIRO’s website and select “Open an account”.
2. Choose “Junior Account” option.
3. Enter the child’s personal details (full name, date of birth, TIN).
4. Add parent/guardian as legal representative (provide your details).
5. Upload all required documents (see Step 3).
6. Wait for verification (can take 1–3 business days).
7. Once approved, you can deposit funds and start investing.

Expected outcome: You’ll receive an email confirmation and see the child’s account listed under your profile.

Example: Opening a Junior Account with Trade Republic

1. Download the Trade Republic app or visit their website.
2. Go to “Profile” → “Open New Account” → “Junior Account”.
3. Fill in the child’s details, then your own as the legal representative.
4. Upload ID and address proof for both you and the child.
5. Follow the video identification process (if required).
6. After approval, transfer funds to the new junior account.

Expected outcome: The junior account appears in your app, ready for investment.

• Why this matters: Each platform has slightly different steps and may require a video call for ID verification.
• What can go wrong: Skipping a required field or uploading incomplete documents can pause your application.

Step 5: Fund the Account and Choose Investments

Once your account is active, you can transfer EUR funds from your bank account. Most brokers require a SEPA transfer from an account in the parent’s name for the first deposit (for AML reasons).

• Why this matters: The first deposit often triggers final account activation and helps confirm your banking relationship.
• What can go wrong: Third-party transfers or mismatched names will be rejected or delayed.

Best ETFs for Children (EUR-based)

• Vanguard FTSE All-World UCITS ETF (VWCE, ISIN: IE00BK5BQT80): Globally diversified, accumulating, low cost (TER 0.22%).
• iShares Core MSCI World UCITS ETF (EUNL, ISIN: IE00B4L5Y983): Developed world exposure, accumulating, EUR-denominated (TER 0.20%).
• Xtrackers MSCI Emerging Markets UCITS ETF (XMME, ISIN: IE00BTJRMP35): Adds emerging markets exposure (TER 0.20%).

For most children’s accounts, an accumulating global ETF like VWCE is a strong, simple long-term choice. Accumulating ETFs reinvest dividends automatically, which is tax-efficient for minors in many EU countries.

Step 6: Understand Legal and Tax Implications

Rules vary by country, but key factors to know:

• Ownership: The assets legally belong to the child, not the parent. Parents act as custodians/managers until the child reaches majority.
• Withdrawals: Parents cannot withdraw funds for their own use; withdrawals must benefit the child (e.g., education, health, etc.).
• Transfer of control: At legal adulthood (usually 18), the account is transferred fully to the child.

Taxation for Minors and Parents (Major EU Countries)

• Germany: Children have a tax-free allowance (€1,000/year on capital gains as of 2024). Any income above this is taxed at the child’s rate. Parents must declare the child’s investment income if it exceeds the allowance.
• France: Minors’ investment income is taxed as part of the household until the child files taxes separately. The “Livret A” is tax-free but limited in investment options.
• Spain: Income above €1,600/year (2024) must be declared for the child. Parents are responsible for filing.
• Netherlands: Assets are included in the parent’s Box 3 for wealth tax purposes until the child turns 18.
• Italy: Similar rules apply: parents declare income until the child is of age. Tax-free allowances exist.

Always check your local tax office or consult a professional to ensure compliance. Failing to declare investment income for minors can result in fines.

Step 7: Teach Your Child About Investing (Optional, but Powerful)

Involve your child as early as possible. Show them the account, explain what an ETF is, and discuss goals. This builds financial literacy and a sense of ownership.

• Why this matters: Children who learn about investing young are more likely to develop good money habits.
• What can go wrong: Leaving children out of the process can make the account feel abstract or irrelevant to them.

Common Mistakes

• Choosing a broker that does not offer custodial accounts in your country
• Submitting incomplete or mismatched documents
• Transferring funds from an account not in the parent’s name
• Ignoring tax reporting requirements for minors
• Investing in complex or high-fee products instead of broad, low-cost ETFs
• Forgetting to transfer account control to the child at majority age

Next Steps

• Review your broker’s junior account documentation for any country-specific steps
• Set up automated investments to build wealth over time
• Revisit your investment strategy as your child approaches adulthood
• If considering joint accounts for family investing, see How to Open a Joint Investment Account in Europe: Step-by-Step Guide for Couples and Families
• For portfolio transfers, read How to Transfer Your Investment Portfolio to a New European Broker Without Losing Your Mind
• For more on ETF selection, see How to Build a Low-Fee Dividend ETF Portfolio as a European in 2026

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.