Table of Contents
Key points:
- Effective savings strategies for grandparents: Find out which forms of saving will be particularly worthwhile for your grandchildren in 2024.
- Saving without parental access: How to ensure that the money actually benefits your grandchildren.
- Tax aspects and state subsidies: Which forms of saving are tax-deductible and how do you utilise government support effectively?
The savings account was yesterday – How smart grandparents are saving for their grandchildren in 2024!
Grandparents play a crucial role in the lives of their grandchildren. Whether it's imparting valuable life lessons or offering financial support, many grandparents want to provide a secure future for their grandchildren. If you're wondering how best to save for your grandchildren in 2024, you've come to the right place!
Why saving monthly for grandchildren is important
Many grandparents not only want to give their grandchildren a great childhood, but also a financial jump-start into adulthood. Whether it's education, a driving licence or their first home, a solid financial foundation can make all the difference. Especially in times of low interest rates and economic uncertainty, it is important to choose well-thought-out savings strategies that are both secure and profitable.
We have summarised the options available to you below.
Financial provision for grandchildren: What grandparents should consider!
Grandparents who want to make financial provision for their grandchildren are faced with the question of how best to invest the money. One traditional way is to open an account or custody account in the grandchildren's name. However, this requires the express consent of the parents.
An uncomplicated alternative is to open an overnight money account, fixed-term deposit account or custody account in your own name and transfer the saved money to your grandchildren at a later date.
Saving in your own name has another advantage: it can have a positive effect on the grandchildren's entitlement to educational support (BAföG). As the grandchildren's assets are taken into account when calculating BAföG, a large amount of savings can potentially lead to the state support being reduced or not granted at all.
However, special attention should be paid to the following: If assets are transferred to the grandchildren, gift tax is payable if the amount saved exceeds €200,000.
These savings strategies are available for grandparents
When saving for grandchildren, there are numerous options that differ depending on the goal and need for security:
Savings account for grandchildren: A savings account is considered a classic and well-known option. It is suitable if the capital needs to be available at all times. However, interest rates are generally low and offer hardly any profit.
Wealth accumulation for grandchildren: In addition to traditional savings products, you can also invest in property, bonds or shares. Although these options are riskier, they also offer higher potential returns.
Junior custody accounts: This is a custody account that is in the grandchild's name and can be filled with various forms of investment, such as shares or bonds. Paylobby recommends a number of junior custody accounts that offer low fees and flexible savings rates. There are also automated variants, so-called robo-advisors, for which no prior knowledge of the capital market is required.
How to save for grandchildren without parental access
Many grandparents want to ensure that the money they save goes directly to their grandchildren. There are the following options for this:
Trust accounts: These allow the money to be invested in trust for the grandchildren without the parents being able to access it. You can decide when and under what conditions the money is released.
Junior custody account with restricted access: A junior custody account can be set up so that the money is only available once the grandchild reaches a certain age. This ensures that the money is not spent prematurely. It can still be paid into the account.
Savings plans with payout conditions: These savings schemes allow you to set precise rules for disbursement, such as for education or buying your first home.
What are the tax advantages of saving for grandchildren?
Saving for grandchildren can offer tax advantages that you should definitely take advantage of:
Tax-free saving for grandchildren: Tamounts up to a certain amount can be invested tax-free for grandchildren each year. The tax-free allowance for children totals €6384 in 2024.
Saving for grandchildren is tax-deductible: In certain cases, you can claim your deposits as special expenses, for example if the money is intended for the grandchildren's education.
State allowances: Check whether you can take advantage of state subsidies such as the Riester pension or the child building allowance for your grandchildren. Some junior custody accounts also benefit from allowances that you can utilise.
Find the right junior custody account for your grandchildren!
Junior custody accounts thus offer a solid choice for saving for grandchildren, but even if the opening is subject to certain conditions, for example the consent of the legal guardian, the return is better than with the other options.
These special custody accounts offer the options to invest regularly in shares, ETFs or other securities and benefit from the compound interest effect over many years. In addition, they are also available in automated form as robo-advisors, which eliminates the need for time and prior knowledge.
Junior custody accounts are therefore cost-effective and flexible, which makes them particularly helpful for grandparents who want to build up their grandchildren's assets sustainably.
Examples of recommended junior custody accounts in direct comparison
| Postbank Junior Depot | 1822direkt Junior Depot | Consorsbank Junior Depot |
| No custody account fees: Postbank's Junior Depot is free of charge, making long-term saving simple and cost-effective. Wide range of investments: Access to a large number of funds, ETFs and shares.Savings plans from 25 euros per month: Even small amounts can be invested regularly to build up solid assets over the years. High security: Postbank stands for many years of experience and reliability in the banking sector. |
Free custody account management: Custody account management is free of charge for the first three years and remains free of charge thereafter with active use. Free settlement account: Interest of 2.00% p.a. on amounts up to €100,000 for 6 months. Attractive savings plans: 100 ETF savings plans with no execution fee, as well as discounted fund savings plans. Rewards: When opening an account, new customers receive a call money account with an interest rate of 3.30 % p.a. for 6 months on amounts up to € 250,000. |
Free custody account: As with the other providers, there are no fees for the custody account. Large fund selection: Access to a wide range of funds, ETFs and other securities. Individual savings plans: Savings plans can be set up from €25 per month. One-off special payments: In addition to the monthly savings instalments, grandparents can pay in one-off amounts, for example as a birthday or Christmas present. |
| → Particularly suitable for: Grandparents who value security and personal advice. |
→ Particularly suitable for: Grandparents who also want to open a current account for their grandchildren at the same time. |
→ Particularly suitable for: Grandparents who want to be able to deposit large amounts at any time. |
What's the smartest way to save for your grandchildren?
A Junior Depot is one of the best ways to provide for your grandchildren's financial future. It not only offers the chance of attractive returns, but also the flexibility to customise savings plans and adapt them to your grandchildren's needs. By choosing a cost-effective and flexible junior custody account, you ensure that you and your grandchildren have the best chance of building up solid assets in the long term.
So start now with a good junior custody account and make provisions for your grandchildren's future!
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