30.03.2026
Using a funds saving plan or ETF saving plan, parents, grandparents and godparents can make investments for their child, grandchild or godchild, even with smaller amounts. In the longer term, it’s possible to build up assets over the years from as little as 20 francs. We explain why a securities custody account for children is a worthwhile alternative to a children’s savings account or a gift savings account, how payments are made and what to bear in mind when the child reaches legal age.
An ETF or funds saving plan is a great way of giving your child, grandchild or godchild a financial headstart. If you start saving for a child early on and make regular payments, you’ll put your money to work for longer. Price fluctuations even out when investing regularly for children over a long period of time. This tends to offer better potential returns than larger, infrequent payments. A children’s custody account is a good alternative to a gift savings account or a children’s savings account. With an ETF or a funds saving plan for children, the potential returns are often higher than with conventional savings accounts. Even small, regular amounts – around 20, 50 or 100 francs per month – can pay off over the years.
Regular savings can pay off – particularly given that price fluctuations are offset with a savings plan when investing for children. The cost averaging effect reduces the risk of investing at an unfavourable time: with regular investments of the same amount, as with an ETF saving plan for children, more units are automatically purchased when prices are low – and fewer when they are high. By investing over a longer period of time, the child receiving the gift benefits from the long-term growth of the economy.
When investing with an ETF or funds saving plan for children, there is always a certain market risk due to price fluctuations. Here, saving with an interest-bearing children’s savings account or a gift savings account involves fewer risks – and may be the better choice for some parents, grandparents or godparents. In many cases, combining both options makes sense: a children’s account or a children’s savings account for everyday life and for short-term savings goals – and a children’s custody account with an ETF or funds saving plan for long-term asset growth.
An ETF saving plan automatically and regularly invests in an index ETF (exchange-traded fund). A funds saving plan invests in a traditional investment fund. Both options are suitable for long-term, systematic asset growth and can be managed with small amounts. Thanks to regular inpayments, both variants reduce the risk of investing at the wrong time. The costs for ETF saving plans are often lower than for funds saving plans – particularly in the case of actively managed funds.
Returns from investments that are reinvested generate returns – such an effect accelerates asset growth over the years. This compound interest effect is particularly beneficial if you invest for a long time and reinvest the returns. In other words, a longer saving period increases the gains. Example: with the compound interest effect, a monthly payment of 20 francs and a hypothetical average return of 4 percent over 18 years will generate around 6,312 francs. It means a savings plan is a good alternative to a savings account.
The parents or the giver are responsible for managing, controlling and making strategic decisions for the children’s custody account and selecting a suitable ETF or funds saving plan. You need to carefully consider which investment strategy to choose: it’s important not to make mistakes based on emotional decisions so that you don’t jeopardize the money saved for the child. Parents, grandparents or godparents need to weigh up the risks and potential returns and choose a suitable strategy. The investment horizon, risk appetite and investment goal all play a role here. A suitable way to reduce cluster risk for a children’s custody account is via broad diversification. For a custody account with a long investment horizon of 10, 18 or more years, a higher equity component is often advisable, as temporary setbacks and price fluctuations can be evened out over time. As the start of an apprenticeship or studies nears and asset depletion is planned, the risk can be reduced gradually – such as by reducing the equity component or pausing new purchases.
Parents, grandparents or godparents who want to give their child, grandchild or godchild a financial gift for their birth, birthday or other occasion often open a children’s savings account or a gift savings account for children or occasionally pay into such an account. However, a children’s custody account where payments are made via a savings plan usually offers higher potential returns and greater flexibility. What’s more, the child can continue investing as an adult and make an early start on retirement provision. You decide how much you pay in: saving plans are flexible. Inpayments can be increased, reduced or suspended as required – depending on your financial situation.
You can open a children’s custody account in the name of the child receiving the gift. In Switzerland, the custody account legally belongs to the child. The giver manages it up to the child’s 18th birthday. After that, the child has control over it. In other words, you give the money to the child directly; it becomes part of the child’s assets. At 18, the money can be paid out or further invested – the recipient, now of legal age, assumes responsibility for managing it.
A custody account in the name of an adult is more flexible for payout, but legally belongs to the adult (e.g. parent custody account with the purpose “child”). In this case, parents, grandparents or godparents remain the owners of the money and can determine how and when it is transferred. This enables parents to reduce conflicts if, for example, not all of the money is suddenly to become available at 18.
Besides the market risk that you’re always exposed to when investing due to price fluctuations, there are other things that you should consider when looking at savings plans for children. As with all financial investments, custody account fees, product costs (total expense ratio, TER) or transaction costs can also reduce returns when investing for children. For example, a higher TER compared to a product with a lower TER can lead to considerably lower final assets over 15 or 20 years. Bear these costs in mind when it comes to an ETF or funds saving plan for children.
As with other financial investments, a children’s custody account involves currency risk, which can have a negative impact on returns. However, it isn’t usually advisable to opt for an ETF or a fund with an exclusively domestic currency, which in turn, limits diversification. Inflation can reduce returns on the custody account as well. But a relatively high equity component, which can be chosen over a long term, means that this risk is also lower with a saving plan. As a result, ETF and funds saving plans for children are usually far better alternatives than a children’s or gift savings account in terms of costs and risks.
With a funds or ETF saving plan for children, you can build up assets for a child over a longer period of time, even with small, regular amounts. Flexible inpayments – not only from parents, but also from grandparents or godparents – mean a saving plan is a good alternative to the children’s savings account or gift savings account.
A saving plan automatically purchases ETFs or fund units at the selected intervals – similar to a standing order. This can be done conveniently, simply and online via e-finance. Opening a funds saving plan or an ETF saving plan for a child is easy: you need an account and a fund custody account for a funds saving plan. For an ETF saving plan, e-trading is required. E-trading is PostFinance’s online trading platform that you can use to carry out stock exchange transactions easily and conveniently online.
As much as is possible without pressure in the long term. It’s possible to build up assets over the years with just 20, 50 or 100 francs per month. Thanks to low minimum contributions, a saving plan is also worthwhile with small instalments, and the amounts saved can be adjusted flexibly. The important things are regular instalments and the term.
Yes, parents, grandparents or godparents can pay into the reference account (such as a children’s account or a parent’s account). But it’s important to note that the person in whose name the account or custody account is held is always responsible for the tax return. That person is liable for tax on the assets and any income.
When prices fall, subsequent purchases by the saving plan are automatically cheaper. Saving over the entire time improves the chance of recovery. Select a suitable level of risk. Initially, the risk may be higher due to the long savings period. Two or three years before the child’s 18th birthday, risk can be reduced gradually – or the recipient can continue to invest and continue the long-term strategy independently.
