Problems with a "Custodial Savings Account" for a child

Hi Mustachians, wanted to share a huge mistake

Opened this account “Compte soustrait à l’autorité parentale” with my bank advisor. He told me that the account would be on my kid’s name but that I could freely move the money which recently I found out it’s not correct.

Now I want to use that money to fund my kid’s education and can’t touch it until my kid is 18 :unamused: only the Justice de Paix can give the ok and this account is giving 0.20% interest :face_with_raised_eyebrow:

The Justice de Paix wants a complete budget of my expenses and incomes to evaluate the situation. They told me I should expend my money first and use this account only as a last resort.

What solution do you recommend?

Could I close this account and move the money to a custodial savings account in France, for example where it would be potentially easier to get the money out?

Last case scenario, I will open a new account with a higher interest rate and keep it until my kid is 18. It’s my responsibility to read the small letters yet the bank advisor gave a really bad advice.

Thanks!!

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Maybe a bit besides your original point, but: Dont just put the money in a savings account, if your kid is still very young and you have 10+ years.

You can compound so so much more wealth if you properly invest the money until your kid is 18.

Put it in a stock market fund and not a low interest savings account. Even the best swiss savings accounts are not beating inflation even.

Or depending on timeline/risk aversion a mix of stocks/bonds.

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Thanks a lot! I will check Migros Bank, it seems I could transfer out 20k a month. Currently it’s also in a cantonal bank and this thing involving the Justice de Paix is already going too far to be honest. Too many questions and mapping my entire financial life. I understand their role is to protect the child best interests but come on!

I will definitely do it, once I get my money out, thanks!

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From a contractual perspective, aach bank has its own rules in this regard, and they can change their rules if they please. But from a legal perspective, that money is part of your personal taxable wealth. Legally-speaking, the bank account belongs to you until the child turns 18. There are no clear court rulings which say otherwise.

I would recommend just closing the account. I’ve used children’s accounts from several different banks and never had any issues closing them (and transferring the money to my personal account). In fact, Swiss law requires banks to pay out your money upon request.

What I find curious is that the bank would involve the justice of peace, and more curious still, that the justice of peace would make these demands, when there really is no legal precedent to go on.

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Are you saying that the money is his because he is obligated to inculd it in his tax report? Not sure if this is true.
If your kid got an inheritance, you need to declare that in your tax statment, but sure the money is his.

The good you give to your child is own by the child. So if you open a saving in name of your child you can’t move the money. Parents only have the right to manage the wealth (art 318 CC).

Even more, you can’t close the saving account because you don’t own the money. The bank can’t proceed without the agreement of the Justice de paix because the judge has to verify you will put the amount to another account in name of the child or you use it for his current needs (art. 320 and 324 CC). It’s not a weird bank policy : just pure application of swiss law.

In conclusion : always open a account in your name but for your child. You can use the money freely if you change your mind.

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Sorry but this is not correct if the account is in your kids name. You are responsible for it until they are 18 (ie also taxes) but it’s not yours. You can use the money if you show justification in the child’s interest but it’s not your account nor your money. Some banks use this as an excuse to tie you to them which I also consider mauvaise foi and disloyal.

As per the previous thread, the easiest solution I found to get out of it (also from a cantonal bank) is step1: opening an account with in their name with migros bank (who’s policies are much more liberal and in the parents favour), step2: transferring from cantonal bank to the migros account (which they can’t block if it’s also in the child’s name/not your account still), step 3: close the cantonal account and transfer the money from migros back to your account, step4: decide when to close the migros account

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Officially true but not usually applied.

If the bank1 receives a transfer order to bank2 and the beneficiary is the same person they will usually transfer without too much hesitation. bank1 can confirm directly with bank2 (since it’s also in your kids name). You are just playing on specific bank policies for the application of the same regulation that is more “strictly” applied or not between banks, and you transfer the money out yourself later. Worst case scenario: the delay to confirm the justice confirms that bank2 is in their name

Ps. You can indeed close the account at bank1 in their name when it’s empty, no hassle. The rules are about using money not closing accounts with no money :sweat_smile:

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Yeah they refuse to close the account, the bank states that it needs to be transferred to an account supposedly with the same conditions.

I already open an account with Migros Bank and i will keep you updated. Strangely it doesn’t show in the form the options father or mother, should this be something to worry about?

Many thanks to all of you guys! :pray:t2:

Just to confirm : the new account does need to also be in your kids name (not yours) and don’t try to close the first account before you transfer the money…sequential steps.

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Migros Bank has 2 accounts:

  • Compte enfants: compte épargne jeunesse

  • Compte épargne cadeau (parents excluded)

It really depends on the bank. But that would be the case for the OP, since their bank is obviously fussy about it. But that would primarily be a contractual issue with the bank rather than a legal issue. Personally, I haven’t yet encountered this issue at any of the banks I’ve used for my kids’ accounts.

The cited law (Article 318 of the Civil Code) primarily applies to inheritances, as those are legally designated property of the child. The laws governing ownership of salaries earned by children (apprentices, for example) are also relatively clear (Article 323 of the Civil Code).

But allowances and savings which parent’s put away for their kids are a grey area, with rulings (so far) being very vague. Until there are clear rulings, banks are more or less free to set their own rules in this regard. That is the reason why I’m surprised that the bank involved the justice of the peace (unless some of the money in the child’s account originated from an inheritance or a salary).

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That is the reason why I’m surprised that the bank involved the justice of the peace (unless some of the money in the child’s account originated from an inheritance or a salary)

Indeed, that’s not the case (inheritance or a salary), it’s really our own savings.

This is a key reason why i find migros better and more clear in this area than my other banks…migros explicitly explains the difference between the accounts (probably due to enough people having the same issues as us or to prevent wasting time and resources on it). As mentioned by several people, in the end its specific bank policies applied to a grey area…I find this equally frustrating to insurance companies mixing risk insurance with 3a solutions (separate thread, but had yet another friend just fall for it)

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update: the cantonal bank continues to refuse any withdrawn and even the transfer to the Migros Bank without an official document of the Justice of Peace :triumph: I am writing them a letter requesting the transfer to Migros Bank, stating that the account holder is the same. Any more suggestions? Thanks!

Are you doing it at the caisse or ebanking? I did mine through e-banking and no questions since to/from are same person.

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Can’t transfer via e-banking :face_exhaling: I can only see the account balance

Update:

Got a notice of cancellation for my transfer to Migros Bank

Reason: the conditions required to execute your order have not been met

:triumph:

The bank refuses every transaction without the authorisation from the Justice of the Peace.