I’ve created an account in the name of my goddaughter at Cash (BankZweiplus).
They offer a “Fondssparplan”-setup for children and youths without any “Courtage/Comissions” and no deposit fee (up to 25’000 CHF) with a reasonly large selection of ETFs to choose from (no US ETFs). It’s surely not as good an offer as with IB, but for what I was looking for, this’ll do the trick:
I did the following for my son : invested 10k chf on degiro in IWDA (free etf) because it is accumulating. I dont need to care about reinvesting. We will see in 18 years what is the result of this investment
Could be OK if you have more than 200k in your account otherwise you have to pay the inactivity fees for the extra account which is not worth it if you only fund it with a little amount every year.
I did something similar last year for my sons, but I did with UBS (probably a big mistake I know)
I pay an amount monthly, into each son’s custody account, and this then invests into the UBS (CH) Investment Fund Equities Global passive W (TER 0.25%)
Not very exciting product, but low TER.
Im trying to review now the costs I pay for this and being UBS its not easy to find out. I see each monthly trade has a “Transaction price” but I cant see how this price is arrived at. Any ideas. Any other thoughts on what I am doing here? It is madness?
The problem I see with separating out an investment on my personal trading account is that, as the monthly amount is a couple of hundred francs, I would waste a bit each month on trade fees. I suppose I could transfer monthly, and trade quarterly. I just prefer things to be set up and done automatically.
I had received something similar from my dad. The fees were ridiculous, 2% transaction fee every time you make a deposit. And only UBS funds with high TER are available. They also claim there is a management fee of 0.35%, not sure if this is included in the TER.
An extra 0.33 USD of waste (if you use IB, and do it at the same time as your other trades, when converting the bulk from CHF to USD). Isn’t that irrelevant?
The problem at the moment is: there‘s no interest to write home about, rates are almost zero or, plainly put, not worth to save for.
I‘ll second this suggestion: opening up and making regular payments towards a simple ETF savings/investment plan.
Don‘t overcomplicate things by trying to eke out the last few cents with IBKR, optimizing withholding taxes with U.S. funds. Choose something straightforward that reports to tax figures to Switzerland and is marketed here. Preferably on a Swiss account, though I might venture as far as Germany, if I (and she, more importantly!) speak the language.
Once she turns 18 and/or if anything happens to you prior to that, she (or her guardians) should be reasonably able to handle things on their own.
I have been thinking about the same thing recently. What do people think about using a robo-advisor for ease in this case?
True Wealth or Selma for example. Set up regular payments, tell the grandparents how to transfer money (if they want to) and let the robo handle all the work, and provide the tax statement.
To me, it sounds like a decent chance of return with minimum work to manage, but I’m just a newbie to all this so maybe I’ve missed something important.
Maybe that’s an option for you to consider as well?
We control the accounts atm, but in the name of our children, one for each. You can choose the asset allocation, very broadly. TER 0.54% for global stocks, no other fees. We pay in monthly, per standing order, minimum required is 50 CHF per account.
It’s the only solution I know in Switzerland where you can have monthly, low payments, overall lowish costs (compared to other Swiss suppliers) and high flexibility, including having the accounts in the name of children.
I think there is space for a VIAC-style app for this kind of 18-year-max blocked investment accounts.
Even simpler, the investment is fixed, the app just let you put money there for 18years at 5-6% interest.
I just learned this week that you can easily create additional linked accounts (under the same credentials) in IB and name them after your kids, so it’s super easy to keep the accounts separate.
Did you try it ? Is it worth it for small amounts / limited shares number under children’s account? I’m interested as well but atm i keep track of it (1 ETF x kid) with a simple google sheet and maybe this is enough for my use case
I’m just opening the first of 2 linked accounts, will let you know afterwards. Yeah, for one kid it is probably enough to track it in a Google Sheet, but I also like the ability to switch accounts in the IB app, and also have separate cash accounts for the kids while waiting to invest.
Hi @Mobius – any update on the process for opening a linked account, how well it integrates where you want it to integrate and appears separate where you want it to appear separate, etc.?
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