Child Savings

ETF Savings Plan for Children: Long-Term Wealth in Germany

ETF savings plan for children in Germany: how parents build long-term wealth and what expats should know about structure, taxes and strategy. Read more.

Written by Nabil Khan, Founder and Managing Director, M.Sc. Economics and Finance · 7 March 2026

Explained

ETF Savings Plan for Children in Germany

Many parents living in Germany want to start building wealth for their children early. One of the most common strategies is an ETF savings plan for children.

But how does an ETF savings plan actually work?

What advantages does it have compared to traditional savings accounts - and what should parents in Germany consider before investing for their child?

When it comes to long-term saving for children in Germany, several factors matter: the investment structure, tax considerations, flexibility and long-term financial planning.

In this article, we explain how an ETF savings plan for children in Germany works, what advantages it offers and which structural aspects families should keep in mind.

If you want a broader overview of the topic, you can also read our detailed guide:

Saving for Children in Germany: The Complete Guide for Parents

To the Article

What is an ETF savings plan for children?

An ETF savings plan for children is a regular investment into exchange-traded funds (ETFs) designed to build long-term wealth.

Instead of investing a large amount once, parents invest a fixed monthly amount.

Typical monthly savings amounts include:

25€ per month
50€ per month
100€ per month or more

The money is automatically invested into ETFs that track global stock market indices, such as the MSCI World or other diversified international markets. The advantage of this approach lies in long-term investing over many years.

Through consistent monthly investing, the compound interest effect can develop - a key driver of long-term wealth accumulation. While simple ETF savings plans often invest in a single index, more structured solutions frequently use diversified portfolios.

At ETF4Kids, for example, portfolios can be structured individually and may combine several asset classes such as diversified ETFs, different market segments, and complementary elements like gold or real-estate funds.

The goal is not short-term speculation, but long-term stable portfolio growth.

Which structure makes sense depends on the individual family and factors such as:

the monthly investment budget
the investment time horizon
risk tolerance
long-term goals for the child

For this reason, many families look beyond a single ETF savings plan and consider the overall structure of their child’s investments.

In short

The answer in 30 seconds

An ETF savings plan automatically invests a fixed amount every month — spread across hundreds of companies worldwide. Typical rates are €25–100 a month; over 15–20 years compounding does heavy lifting. Just as decisive as the ETF: the structure — who owns the money, when is tax due, who decides at 18?

Regular instead of one-off: from €25 a month
Broad diversification via global indices like the MSCI World
Compounding works hardest with an early start
If the plan runs in the child’s name, the money is the child’s at 18

Why many parents use ETFs to invest for their children

Many families choose ETFs when investing for their children because ETFs combine several advantages.

Diversification

ETFs typically invest in hundreds or even thousands of companies worldwide. This reduces the risk associated with individual companies and creates broad market exposure. For long-term child investing, diversification is particularly important.

Long-term growth potential

Historically, global stock markets have shown positive growth over long periods. For parents investing over 15 to 20 years, this long-term growth potential can be a major advantage.

Flexible savings plans

ETF savings plans are usually highly flexible.

Parents can:

increase their monthly contributions
reduce the investment amount
pause the savings plan

This flexibility makes ETF investing attractive for many families.

How much should you save for your child each month

One of the most common questions parents ask is:

How much should you actually save for your child every month?

The ideal savings rate depends heavily on a family’s goals.

Typical monthly investment amounts are often between:

25€ and 100€ per month
100€ to 200€ per month
or higher for long-term strategies

Even relatively small monthly contributions can grow significantly over time.

A detailed analysis can be found in our article:
How Much Should You Save for Your Child Each Month?

In that article we show examples of how different savings rates can develop over time.

What role do taxes play when investing for children in Germany?

When investing for children, the tax structure is also important. In Germany, certain tax allowances may be used when investments are held in the child’s name.

Examples include:

the saver’s allowance (Sparerpauschbetrag)
the basic tax allowance (Grundfreibetrag)

However, there are also tax rules parents should understand, especially when investment income exceeds certain thresholds.

You can find a detailed explanation in our article:
Taxes on Child Investments in Germany

There we explain which tax aspects parents should consider when investing for their children.

from 25 €

a month to start

small rates are enough to begin

ca. 1,400

companies in the MSCI World

broad diversification with a single ETF

18 years

horizon from birth

time is the strongest factor

Comparison

ETF savings plan vs. child investment account

Many parents compare an ETF savings plan with a traditional child investment account (Kinderdepot).

However, these are two different things. An ETF savings plan describes the investment strategy, while a child investment account refers to the account structure used to hold the investments.

Which option is best depends on several factors:
tax situation
flexibility
long-term family structure
access to the money

You can read a detailed comparison in our article:
Child Investment Account vs ETF Savings Plan

There we explain the differences between the most common options.

Read the Article

What risks should parents consider?

Although ETFs offer many advantages, parents should also be aware of certain aspects.

Market volatility

Stock markets can fluctuate in the short term. For this reason, ETFs are most suitable for long-term investment horizons.

Access to the money

If investments are held directly in the child’s name, the money legally belongs to the child. Once the child reaches adulthood, they gain full access to the funds.

Long-term planning

Many families underestimate that successful child investing depends not only on the investment product but also on the overall financial structure of the household.

Frequently asked questions about ETF savings plans for children

At what age can you start investing for a child?

An ETF savings plan can theoretically start immediately after a child is born. Many parents begin early to maximize the long investment horizon.

How long should you invest for a child?

Typically parents invest until the child reaches 18 years of age or longer. The long investment period strengthens the compound interest effect.

Can you stop an ETF savings plan at any time?

Yes. Most ETF savings plans can be paused, adjusted or stopped at any time.

Are ETF savings plans safe?

ETFs are subject to market fluctuations. However, over long periods global stock markets have historically shown positive growth.

Time beats timing

What if you had started at the worst possible moment?

Pick a starting year and see what would have come of it. Real index data, not an assumption.

Which year would you have started in? 2000

Jump to:

Paid in: 30,000 €
Value at the end of 2025: 130,259 €
Return per year: 10.3 %; 25 years of saving

Value of the savings plan Paid in

The years in which the green line sits below the paid-in line are real — and they were long. Whoever started in 2000 spent stretches of more than a decade in the red.

And the end result is still a plus. Not because of the entry point, but in spite of it. That is exactly why a child savings plan is the one investment where timing matters least — the 18 years are a given.

The same figures to read up on — saving started in 2000, 100 € per month.
Until the end of	Paid in	Value	Return per year
2005	6,000 €	7,360 €	8.1 %
2010	12,000 €	14,270 €	3.4 %
2015	18,000 €	34,835 €	8.3 %
2020	24,000 €	64,346 €	9 %
2025	30,000 €	130,259 €	10.3 %

Source: Deutsches Aktieninstitut, MSCI World return triangle for monthly investing, as of 31 December 2025 (data: MSCI Inc.). The calculation uses the gross variant of the index and excludes costs — which is why these figures sit above the 9.7 percent we use for projections elsewhere. Past performance is not a reliable indicator of future results.

Illustrative model calculation based on an assumed, constant rate of return. It is neither a forecast nor a promise. Past performance is not a reliable indicator of future results. Investments involve risk.

Why structure matters more than individual products

Many parents focus heavily on choosing the right financial product. In practice, however, long-term success often depends less on a single investment and more on the overall financial structure of the family.

This includes:

household financial structure
tax planning
family protection strategies
long-term investment planning

For this reason many families also look at topics such as household optimization.

An ETF savings plan is only one part of financial planning

Many parents initially focus on one question:

Which ETF should I choose?

In reality, long-term financial success rarely depends on a single investment decision. Instead, it often depends on the overall financial structure of the household.

This includes:

children’s savings strategy
tax structure
family protection
household financial planning
long-term wealth strategy

For this reason many families choose to review their financial structure as a whole rather than focusing on one investment product.

Would you like to review your family’s financial structure?

Many families discover during a structured review that the real issue is not individual financial products but the overall financial structure of the household.

Especially if you: