Saving for your child: in your child's name or in your own?
· 4 min read · Spaarradar editorial team
Do you save for your child in an account in their name or in yours? Who owns the money, what happens on their eighteenth birthday, how the deposit guarantee works and what to check when you compare.
An amount at birth, ten euros every month, the money from the grandparents: many parents save for their child. The first question is not which bank, but in whose name. That decides who owns the money and who has the say over it later.
Two ways
You can open an account in your child's name, or save in an account in your own name that you set aside for your child. For the interest it makes little difference. For ownership it makes all the difference.
| In your child's name | In your own name | |
|---|---|---|
| Who owns the money? | Your child | You |
| Who decides until the age of 18? | You, as legal representative, in your child's interest | You |
| What happens at 18? | Your child decides, you no longer have a say | Nothing: you decide whether and when to give it |
| Deposit guarantee | A separate €100,000 limit for your child | Counts towards your own limit at that bank |
| Gifts | Every payment in is a gift to your child | Only a gift once you hand the money over |
In your child's name
Money in your child's account belongs to your child. Until their eighteenth birthday you manage it. After that your child may do with it as they please: pay for a degree, buy a car or travel the world. If you do not want to let go of that, this is not the right form.
Some banks restrict withdrawals until a certain age, or let your child see the account from a certain age. Those conditions differ per bank. Read them before you open the account, and also check what happens to the account and the rate when your child becomes an adult.
In your own name
If you save in your own name, the money stays yours. You keep control, also after the eighteenth birthday, and you can give the money in parts. The other side is that nothing records that it is meant for your child. And if you later give a large amount in one go, it may exceed the annual exemption from Dutch gift tax. This year's amounts are on the website of the Dutch Tax Administration (Belastingdienst).
One advantage of your own name: you can use any account in the comparison, including a deposit or a deposit ladder that matures around the time your child starts studying.
The deposit guarantee covers your child too
The deposit guarantee protects €100,000 per person per bank, interest included. According to De Nederlandsche Bank, the Dutch central bank, that applies to adults and to minors. So an account in your child's name has its own limit, separate from yours. If you save in your own name, the amount counts towards what you hold at that bank yourself. Which brands share one banking licence is shown on the page banks and deposit guarantee.
And tax?
You declare the savings of a minor child in your own tax return: they count towards the parents' box 3 assets. If you both have parental authority, each parent declares half. That is set out by the Belastingdienst (in Dutch). Whether you actually pay tax depends on your total assets and your situation. That is why we do not work it out for you.
Why you see no children's accounts in the comparison
Spaarradar compares savings accounts that any adult saver can open. We do not include special children's and youth accounts: they have age limits and conditions of their own, so they cannot be set fairly next to an ordinary account. There is therefore no separate category for them.
The comparison is still useful, in two ways:
- As a yardstick. The highest instant-access rate is now …, and on a one-year deposit …. If a children's account offers far less, you are paying for the label.
- If you save in your own name. Then you simply choose from the instant-access accounts or, for money that can stay put for a long time, from the deposits per term.
What to check on a children's account
- The rate after the promotion or the age limit. A high rate sometimes applies only up to a maximum amount or up to a certain age.
- Who may withdraw, and from when. Ask whether the money is locked until 18 or whether you or your child can get at it.
- Compulsory payments in. Some accounts require a fixed monthly payment. Find out what happens if you skip one.
- The term. Saving for a child often takes more than ten years. What a small difference in rate does over such a period is shown by the interest calculator.
This article is general information, not advice. If you are unsure about gifts or about the consequences for your tax return, check with the Belastingdienst or ask an adviser.
Not advice. Rates are gross and can change; the tables in this article show the position at the moment you open the page. How we calculate and check is described in the methodology.
