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.?
Hi @Mustachioed, the account still shows as pending after all this time (!), so no feedback yet (other than the fact that I did get a drop down list in the desktop software where I can select the account I want to see, or all accounts aggregated - seems to be exactly what I was looking for).
Hello,
I am thinking about opening a bank account for my 2 years old girl, her piggy bank is full, also her grandparents would like to send some cash from time to time.
Does anybody know of a good option? Otherwise, what I’d like to do is investing this money in a VT-like fund but my broker (IB) has relatively high inactivity fees and (afaik) no real multi-user option to split investments.
The main problem is keeping the funds separate for each child. This can be solved in many ways.
You can
buy a fund similar to VT at your existing broker and keep it apart for her eg VWRL
open an account at another, preferably free broker account like DeGiro and do the same (I have referral codes if you PM me). Use VWRL which is free to buy
Open an Avadis fund plan per child, which has already been mentioned here in the forum. Their funds and higher fees but are less volatile. And you get a tax statement. Very easy
There were no extra fees after opening the accounts, but at the same time, I have enough balance at the moment to cover for the 100K USD per account opened.
@mobius would you mind to explain with simple steps the process you have followed to open the linked account(s) ?
Can you access those through the web app as well or only through the desktop software ?
How much did you put on the accounts as a starting point and how much/how often are you funding ?
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