Investing in the future of your children

How can I ensure a good start to adult life for my child? Maybe with some initial financial assistance for him to fulfil his first adulthood dream? A financial investment is also suitable for this. Because investing money does not have to entail investing large sums. You can also make more of your money with regular small contributions rather than simply saving it. And at the same time you can also invest in your children’s future. That is precisely what the funds saving plan is for.

Every two, four, eight or twelve weeks you can purchase fund units for an amount of your choice starting from CHF 20. This way, your invested assets will slowly but steadily grow. You will not only benefit from more attractive returns than if you were to place your CHF 20 note in a piggy bank or pay it into a savings account , but also from the cost averaging effect The cost averaging effect (sometimes referred to as unit cost averaging) comes into play whenever investors regularly invest the same amount in securities. The best example of this is the funds saving plan: investors pay in CHF 20 each month to buy fund units. They receive more units in months when the prices are low and fewer units in months when the prices are high. The cost averaging effect equals out price fluctuations and reduces the risk of choosing a bad time to start investing and being in danger of overpaying for the investment assets as a whole..

Invest money in the long term and achieve more

For parents, the funds saving plan  In simple terms, a funds saving plan is a standing order for investment in a fund. As with a standing order, you decide whether you wish to contribute fortnightly, monthly, every two months or quarterly. This can be done starting at CHF 20 per inpayment. You can also change (e.g. the amount paid in) or cancel the order at any time. is a clever opportunity for investing in the future of their children, as children are actually predestined for long-term funds saving. The reasons for this are obvious:

• Children have a long investment horizon  Your investment horizon is the period over which you wish to invest. This means you have to consider how long you wish to invest your money for and the period of time during which you will not need it for other things. For example, if you are planning to take a training course or a major trip in four years’ time – for which you need the money – this may determine your investment horizon. and therefore offset price fluctuations particularly well in the long term.
• You don’t have to invest any large sums and are barely affected by the ups and downs of the financial markets – which means you also run no risk of being unsettled by them.
• What is more: by opening a funds saving plan when your child is born and regularly making payments into it, you’ll be able to offer your child an attractive boost to start their adult life when they turn 18. An 18-year funds saving plan pays off very well: with the compound interest effect, around CHF 6,312 can be accrued with a monthly payment of CHF 20 and a hypothetical average return of 4% over 18 years. Is that not a good alternative to a savings account?

Learning to invest with small amounts

Funds saving plans are particularly suitable for systematically building up assets with a view to a specific target and in doing so reducing the risk of price fluctuations and starting at the wrong time. They are therefore not a bad opportunity for financing your children’s studies with smart investments or enabling them to spend some time abroad or take their driving test when they get older.

Your child can naturally also remain invested rather than having his assets paid out. He might therefore start investing himself when he reaches 18. A helpful feature here is the fact that funds saving plans are flexible: you can increase your payments at any time, reduce them (to a minimum of CHF 20 per month) or suspend them if things should get tight financially. In addition, a funds saving plan is also a simple way of giving your child a practical understanding of the topic of investing and answering questions such as how exactly investing works, what happens on the stock markets, how interest and compound interest work in detail, and what a fund actually is.

How it works: the standing order for investing

It’s easy to open a funds saving plan for your children: all that is required is an account and a fund custody account that you can open for your children. Fund units are then purchased directly for the investment amount you determine and at your preferred intervals – a bit like a standing order. This can be done conveniently, simply and online via e-finance.