From BZ/dpa
Starting adult life with a financial cushion – many parents want to make it possible for their children to do so. It’s best to start saving for it early. This is something to consider.
For a long-term savings investment by parents for children are particularly suitable ETF Savings Plans to a global stock index.
This is what the magazine “Finanztest” recommends in its current issue (11/2022). The risk is widely spread here and the deposit is usually cheap, with some banks even free of charge.
However, if you invest money regularly, you have to reckon with purchase fees for ETF savings plans – depending on the provider, these were between 1.20 and 33 euros a year in the test (19 offers from branch and direct banks for a savings rate of 50 euros per month). However, three offers even got along without fees.
use the interest effect
It is advisable to look for an accumulating variant of an ETF, which means that the annual return is automatically reinvested. This is how the interest effect is used.
ETFs investing worldwide would have paid off in the past: over a period of 18 years, there would have been an average annual savings plan return of 8.5 percent.
But if you want to invest for less than ten years and or don’t want to take any risk at all, according to “Finanztest” you are also well advised to invest in a fixed-term deposit – interest rates are currently rising – up to 3 percent interest for an investment period of five years are possible here.
Insurance offers or gold savings plans, for example, are not recommended according to the “Finanztest”. Here, either the return is too low or the fees are too high.
Attention, Bafög limit
Before starting a savings plan, parents should think carefully about how much money they want to invest for their offspring and in whose name it should be saved.
If it is in the child’s name and the income is not too high, it does not have to be taxed. But: If the savings exceed 15,000 euros, it could become difficult later with a student loan application.