Investing for Children in Germany: Open and Manage a Depot

expats.de has explained German financial decisions since 2014. This guide separates the practical account process from investment selection and tax decisions. Read the junior account comparison for verified product terms and the children's tax guide for allowances. Neither replaces advice on your family's tax position across countries.

Decide who should own the money

A genuine Junior Depot has the child as account holder. A parent opening another depot in their own name creates a different arrangement, even if they privately label it “for my child”. Ownership affects tax, access, gifts and means-tested benefits. Decide this before sending money, not after an investment has grown.

With a child-owned account, you manage another person's property. The money isn't a family emergency fund. Keep the child's assets and your household spending separate. German parental-care law includes responsibility for the child's property; the child's interests guide your decisions. A transfer to the child isn't a reversible tax arrangement.

A junior account may be unsuitable if you need to decide unilaterally how the money is used after the child's adulthood. It may also be unsuitable for money needed soon. Share prices can fall just before a school payment or a move. Decide which money needs stability and access, and which money can remain invested through market falls. A long horizon provides time, not a guarantee against loss.

Check whether the bank can accept your family

Ask about every guardian and the child. Give the bank their nationalities, current residence and tax residences. A German address alone doesn't establish eligibility. The bank may accept some passports through online identification and require another procedure for others. Sole custody, different surnames and documents from another country can require additional evidence.

US citizens and other US tax persons need an additional check. A bank's willingness to open an account doesn't settle the US treatment of a European investment fund. Before choosing an ETF, obtain advice on your child's reporting obligations and investment restrictions. Our US investing guide explains why standard German ETF suggestions cannot simply carry over.

Check whether one or all guardians need personal accounts first. Establishing those accounts can be a separate application. The other guardian's consent and access should remain workable after separation or an address change. Ask how the bank records sole custody and how you update it. Don't submit an inaccurate family status to simplify the process.

Prepare the documents before applying

Gather the child's German tax identification number, birth certificate and any required identity document. Prepare identity documents and tax details for every guardian, plus evidence of custody if relevant. A bank may ask for a marriage certificate or additional evidence when surnames differ. Foreign documents may need a translation or certification; ask the bank for its actual requirements.

The child's tax ID differs from a tax number assigned for a particular tax-office file. Don't substitute a parent's number. The Federal Central Tax Office explains the identification number and how to request it again. Use its official process if the original letter is missing.

Read the document checklist for the junior product itself. An adult online application may need fewer records. Keep the child's name consistent across the application, funding reference and tax instruction. Store copies securely and record which bank received them. Don't send originals unless the bank explicitly requires them and explains how it returns them.

Open, fund and check the account

1. Choose a provider that confirms your family's eligibility. Save the applicable junior tariff and opening conditions.
2. Complete the application in the child's name. Each required guardian identifies themselves and gives consent through the bank's process.
3. Submit the child's documents and any custody evidence. Wait for the bank's account confirmation before sending money.
4. Check the settlement-account holder and funding instructions. Some banks restrict which accounts may send or receive transfers.
5. Set the child's tax instructions and then create the investment order or savings plan. Confirm that the first execution actually occurred.

A completed application isn't an opened account. Don't promise a gift donor that a payment can arrive until the bank supplies confirmed details. If an identification step fails, ask the bank which alternative it accepts. Repeatedly opening applications under different information can complicate the review rather than speed it up.

After opening, check the first statement. Confirm the account holder, contribution, purchased units and execution charge. Keep the trade confirmation and record acquisition data. Check that you haven't created a standing order without a securities savings plan, or a savings plan without enough money in the settlement account. Those are separate instructions.

Choose an index approach before a fund

An index describes the market an ETF aims to track. At index level, MSCI World covers developed markets, while MSCI ACWI and FTSE All-World include developed and emerging markets. They follow different construction rules. More than one index fund can hold many of the same companies, so adding a second fund doesn't automatically increase diversification.

Check the MSCI index descriptions and FTSE Russell index information to understand coverage. Then examine the investment's own documents, costs, replication method and risk information. This guide doesn't recommend a named fund, ISIN or WKN. An index label alone doesn't answer whether a product fits your child's tax position or intended use.

Distinguish the fund's dealing currency from the currencies of its underlying businesses. An account displayed in euros can still carry exposure to other currencies. A global share index can also have substantial concentration in particular markets or companies. “Global” doesn't mean equal weights or no risk. Narrow country, sector and fashionable-theme indices require a different concentration decision.

Make the savings plan fit your cash flow

A savings plan buys at the agreed intervals. It doesn't prevent losses or make each purchase cheaper than a lump sum. Choose a contribution your household can sustain without using the child's money for later emergencies. Keep your own emergency reserve separate. Pause or reduce future contributions if the family budget changes.

For an existing gift, decide how much belongs in investments and how much needs to remain accessible. Investing at once exposes the money to market movements immediately. Spreading purchases changes the timing of that exposure and leaves cash uninvested in the meantime. Neither method guarantees a better result. Avoid a return forecast that disguises assumptions as an expected outcome.

Distributing investments pay income to the settlement account; accumulating investments retain income within the fund. Accumulation doesn't automatically remove German tax. A deemed-income charge can matter even without a cash distribution. See the Vorabpauschale explanation. Keep enough accessible cash for charges the bank may collect.

Give birthdays and school milestones a clear process

Relatives can contribute to a child-owned account, subject to the bank's funding rules. Tell donors whose property the gift becomes, how to identify the payment and whether the money is intended for long-term investing. A school-start gift or birthday contribution can support the same plan; you don't need a new financial product for every occasion.

Record the donor, recipient, date and amount. Keep a separate record for each child. Ask donors to avoid sending money through another relative merely to make the paperwork look simpler. The actual gift relationship matters for tax. The gift-tax section explains the distinction between the gift and later investment income.

A contribution does not give grandparents or godparents trading authority. The guardians still manage the account. For a cross-border gift, check whether another country requires reporting or imposes tax. A German allowance doesn't settle obligations elsewhere. Agree on the practical process with relatives before they transfer a large amount or securities held abroad.

Transfer a depot without losing its records

Check that the receiving bank accepts your child's existing securities. An account transfer and selling investments to buy replacements are different actions. A sale can realise gains or losses. A transfer that leaves the child as owner generally doesn't itself sell the holdings, but the banks need the correct ownership and tax information.

Open the receiving child-owned account first. Request the transfer using matching holder details and indicate any owner change accurately. Ask both banks how they handle fractional holdings, blocked securities, cash and pending savings-plan executions. DKB's transfer instructions explain that units and acquisition data may arrive separately.

Keep the old statements until you have reconciled every position and its acquisition data. Check whether the savings plan needs recreating; a securities transfer doesn't necessarily transfer recurring instructions. Only close the old account once the remaining cash, statements and tax information are accounted for. Moving a parent's securities to a child instead changes ownership and requires a separate gift assessment.

Prepare the handover at adulthood

At 18 your child becomes legally adult under § 2 BGB. The money already belongs to the child; the birthday changes who can exercise control. It doesn't create a fresh gift of the existing portfolio. The bank may require new identification, terms and access arrangements.

Prepare together before the birthday. Explain the holdings, their risks, tax records and purpose. Check future fees because the adult account may use different conditions. Your previous access may end. If your child wants continuing help, arrange a valid power of attorney with the bank rather than sharing credentials. The adult account holder decides whether to grant it.

Frühstartrente and the retirement-account reform

The Federal Government confirms that the Bundestag approved the Frühstartrente on 16 October 2026. At this review the Bundesrat stage remains open. The announced start is January 2027. Don't describe parliamentary approval as an already available payment into an ordinary Junior Depot.

The Altersvorsorgereformgesetz legislative record records the retirement reform law of 26 May 2026. The new retirement products are distinct from flexible children's investment accounts. A provider's waiting list doesn't establish certification, final product conditions or your child's eligibility. Keep money intended for education separate from decisions about retirement restrictions.

Before leaving Germany

Tell the bank about the planned country and moving date before deregistering. Ask whether it will keep the child's depot, permit new contributions and accept the new tax residence. Continued custody, trading and savings plans can have different rules. Request a written answer and a workable transfer route if the bank cannot continue the relationship.

Keep acquisition records, gift history and tax statements outside the bank's app. A destination country can tax investment income differently or impose additional reporting. A German tax exemption doesn't automatically remain usable after departure. Exit-tax rules may also matter for particular holdings and circumstances, so obtain cross-border advice before selling, transferring ownership or assuming that a child's portfolio is exempt.