Saving for your child

Frequently asked questions about saving for a child

How can I invest for a child?

In the short term, you can save money in your child’s account. Since money saved for a child will often be invested for many years or even decades, you should also consider options that typically offer better long-term returns than a regular savings account.

Fund investments are an easy and popular way to invest money saved for children. Time will help even out the market fluctuations, and in the long term, money invested in funds may also grow thanks to compounding. When you save regularly and gradually grow your investments, your earnings will compound, and the effect of compounding will only grow bigger over time. And time is a saver’s best friend. 

You can also conclude a monthly savings agreement with us for your child. Under the monthly savings agreement, we will transfer the agreed amount from the selected account to the selected fund for your child each month.

Should I put the money I save for my child in an account, in an investment fund or in shares?

A savings account may be a good option for saving in the short term, which means a period of a couple of years at maximum. 

If you are planning to save for your child longer than this (many years or even decades), you should consider investing the savings in a fund. Funds typically have a higher expected return, as inflation will, over time, eat away at the value of savings kept in bank accounts. Investing in funds is quite an effortless option: a portfolio manager looks after the funds without you having to spend time monitoring the markets or share prices.

If you want to invest your child’s money in shares, your child will need a book-entry account or an equity savings account and trading services. Investing in shares may be a good option if you want to manage your child’s investments actively, are interested in monitoring the market fluctuations and perhaps seek higher returns. 

The law requires you to invest your child’s money safely, so remember to ensure sufficient diversification, for example. You can only buy products for your child that are listed on a stock exchange within the European Economic Area (EEA). If you want to trade on behalf of your child on stock exchanges outside the EEA, you will need a permit from the Finnish Digital and Population Data Services Agency. The permit is subject to a fee.

How much should I save for my child?

It’s not possible to define a universal amount. You can decide the amount you want to save for your child based on your objectives and your circumstances. 

Even a small regular amount can grow nicely over the years: you can get started with regular fund saving with as little as 10 euros a month. 

Use our calculator to estimate how much your child’s savings can grow over time. Try our savings calculator 

You can donate up to 4,999 euros to a child tax-free in three years. Read more about gift tax on the Tax Administration’s website

When you invest your child’s savings, any capital gains are considered taxable capital income for the child. For example, if your child’s fund investments gain a return, your child won’t need to pay tax until the fund units are sold and the capital gains are taken out of the fund.

If the value of your child’s assets exceeds 20,000 euros before your child turns 18, you will need to list your child’s assets and report them to the Finnish Digital and Population Data Services Agency. You (as the child’s parents or guardians) will then be obliged to submit an annual report on how the child’s assets have been managed and used during the year.

How can I save for my grandchild or godchild?

If a godparent, grandparent or friend wants to save for a child, the best option is to transfer money to the child’s account. This way the child’s parents can invest the money for the child in a fund or in shares, for instance. 

If the child already has a unit-linked insurance policy, you can easily transfer money directly to the child’s policy.

What are my rights as the guardian towards my child’s savings?

Any savings and investments in the child’s name are their property, but the guardian can monitor and manage the saving and investment services opened for the child. 

So if you are saving for your child in an account or fund in the child’s name, the savings are your child’s property and you can’t use them for the family’s other expenses.

Once the child turns 18, they can decide on their assets alone.