My girlfriend would like to start investing with a low sum. She’s under 25 years old but the 3 CHF/month would still take away quite a bit of her investment every month.
I looked into creating an account for her under my own using the “Create a New Individual, Joint or IRA Account that will be Linked to My Existing Account Under a Single Username and Password”. I have enough capital in my account that the fees will be waved for her aswell.
How’s this going to be handled for tax reasons? Will she have a fully separate tax statement? I don’t want to have any trouble with that. I do know that she probably won’t be able to reclaim the withholding taxes using the DA-1 form as the amount would be too low.
What I mean is that I wanted to invest 10kCHF now for each of my children and then let the magic of compound interest do the work. I live in the Neuchatel Canton, so I can only give 10kCHF / year without being taxed. The fact that I can’t open an account for each of them today means that I will have to wait for them to be at least 18, and if I invest today for them, the amount result will be way higher than 10kCHF and I will be taxed, or I will have to give them 10CHF / year for at least 10 years if I want to keep the same result.
I have 2 accounts in my kids names (decision 10 years ago, before I knew what real limitations this had). I had resigned myself to this fact and was « satisfied » since I was still able to invest the cash for a not too bad swisscanton fund (albeit high costs) over 10 years…however, I just sold the funds thinking to go into another index fund for the last 8 years and the bank has told me that the rules have changed and I can no longer invest in anything but their own funds capped at 45% actions! So I’m sitting on almost 2 x 20k CHF cash in their names and dont want my kids to lose out on 10 years of gains.
Anyone know of a bank that will allow a parent to invest for their kids, or better yet what the exact law is to challenge the bank (not hopefully on that)? They say its in the kids’ interest vs risk, but its basically them pushing their own funds exactly as they did with me on 3a…told them they are losing a mortgage and all my business as soon as the term is up next year.
In the meantime, all advice is welcome except time travel
The money is in their name so to get it out to invest somewhere else, it must also be in their name - afaik you can’t open trading accounts for minors.
I’d love to see the actual law so I can challenge their internal regulation/interpretation. I am just frustrated that they justify denying me investment in some
of the only passive index funds I can get through them (even with their high “ droits de garde “) by saying they’re protecting my kids interests and then propose an active fund with even higher expenses (theirs) as an acceptable option for them. Conflict of interest in my opinion.
Open a Jugendsparkonto at Migrosbank. From there you can transfer it to your account.
Das Angebot ist verfügbar für Privatpersonen ab Geburt bis zum 18. Geburtstag. Eröffnen die Eltern das Konto, können sie bis zum 18. Geburtstag des Kindes frei darüber verfügen. Der minderjährige Kontoinhaber hat keinen Zugriff. https://www.migrosbank.ch/de/privatpersonen/sparen/jugendsparkonto.html
You should also asked Fonds de placement | Avadis if you can transfer the amount of money from your children to them. As the bank account it’s in the name of your children, you can’t withdraw the amount unless you have a really good reason to use this money as it’s not your money, but your kids’ money now, and bank need to protect the child’s interest by law.
No, it isn’t. Code Civil suisse article 320 al.2. They money is managed by the parents but the child is the assets owner.
By law, you can withdraw the money from his account only to pay the expenses related to the child. Swiss banks can be more or less flexible on this. Technically, they can ask for a copy of the bill before releasing the money.
i agree that they should be protecting the childs interest - for sure. However, they shouldnt be proposing active managed funds (their own) with TER above 1.2% and not allow passive managed less than 0.8%… They are trying to apply 3a rules on my kids accounts. Frustrating.
I’ll look at migros too then thanks. Are you sure than they’d let me (experience?) or just an idea? As mentioned here, the banks all interpret the law differently. I could take the money out gradually for expenses, but huge amounts of admin over a few years to do this.
PF offers funds accounts and a very short list of third party funds. I didn’t see anything on there that was better than what my bank is offering…did I miss something worthwhile?
Do you have experience with them? Second person to mention them to me.
Overall, I’ll ask my bank to clarify in writing their position on the « gift accounts » in relation to the law. As the TER is higher for an actively managed fund with less actions, I really don’t see how they can justify « interest of the child » than a lower TER, passive index fund on 10 year horizon. worst part is that I just had funds invested for them, and they say that « their regulations have changed ».
I did this several times in the last few years. I transfered money from my kids Migrosbank Jugendsparkonto to my own Migrosbank account. The monthly limit is now 20k and you can open 2 accounts for each kid.
No I don’t. I’ve never try their services but I do considered to try it when I was looking to invest for myself. Some gentlemen in this forum are using their services and they seem to be satisfied.
From what I’ve read on their services, I would personally considered it for my hypothetical child if I don’t want to open a broker account with DeGiro for example. Overall, their TER is not too expensive for a mix of passiv/active management.
Seeing all these complications and unnecessary costs - I would probably be buying VT within my own account and count them as “my child’s” until I decide to transfer it or the cash to them.
What would be the implications of that approach (tax-wise at the end mostly; some sort of an intra-family gift)?
In the end I opened a Degiro account where I’m buying VWRL commission free with that money for my kid. My personal account is on IBKR so it’s separate.
Isn’t it the easiest to make a link account on IB, still under your name ?
I just looked quickly into it, as long as the whole sum is n*100’000 (n being the number of accounts), all is good.
This is exactly what I do but how are you going to count it? I do it in a really simple way and would like to know other approaches. I buy monthly VT within my account for me and my 2 daughters: 2 shares per month for each and the rest for me, i.e. with 18 years they will have 432 shares each
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
