Investing for children has moved on from Henry the Hippo.  Whether it’s planning for the cost of education, or a headstart in adult life, many parents see the advantages of putting money away now for their kids’ future.

Trouble is, it’s not obvious how.  So too many parents end up putting their cash into poor-paying bank accounts.

Moneycube thinks that needs to change.

It might seem strange, but the perfect investor could be a five-year-old.

Trust fund babies?

Kids might not seem the most rational decision-makers, but they have one big advantange when it comes to investing: time.  If you commence building up funds for a child at birth, their money has the guts of two decades to build.

And that means you should seriously consider putting the money into an investment, not a bank account.

A 99% win rate

The authoritative data on the advantage of time comes from Barclays, which has crunched numbers from 1899 to the present.

Their research found that the stock market outperformed cash deposits over an 18-year period 99% of the time.

So while the ‘you may get back less than you invest’ warning still applies, over this period, it would be highly unusual.

What does investing for children look like?

At Moneycube, we make children’s investment funds possible from a lump sum of €2500, or a regular €250 per month.  Think of it as the child allowance plus a top-up.

You don’t have to be a millionaire to start investing for your child’s future: the important thing is to make a start.

For Moneycube, a child investment pot needs two key features.

It needs to be easy to manage, so you can update the investments in the pot over the years.  And it needs to be clearly demarcated, so that anyone can contribute into the fund, and the assets are clearly owned by the child.

Where and how?

At Moneycube, we like Zurich’s Child Savings Plus plan when it comes to investing for children. It offers a decent range of funds, ease of management for you as a parent, and the ability to assign the fund to a child.

Of course you need to be able to stop and start an investment plan like this.  A look at some sample figures shows how it is possible to build up a substantial fund over time.

We assumed a continued contribution of €250 per month, based on 6% average annual growth, total annual charges of 1.25%, and the current exit tax regime.  In these conditions, a children’s investment plan would turn into almost €72,000 over 18 years.

Get in touch today if you’d like to speak with us about setting up an investment plan for a child.


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By investing €400 a month you could save €27,900 in 5 years

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Note: This is an initial indication to help you picture your money. Remember that with investments it is not possible to know for certain what returns you will achieve. Please note the investment warnings at the bottom of the page. This is the approximate before-tax return on an investment which grew at 6% over 5 years.


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