Investing for your child’s future: Custodial accounts as an alternative to traditional savings (Switzerland)

Do you remember the days when you deposited your savings into a bank account and watched them grow thanks to attractive interest rates? Those days are gone, thanks to the prolonged low-interest environment. The savings account has become obsolete. That's why you might be wondering: How can I save for my child in these times of low interest rates? The answer is simple—just as you would for yourself: by investing the money to generate returns.

In this article, we’ll explore the topic of custodial accounts ("junior depots" in German), what parents should consider, and which providers are available for setting up one. Let’s dive in!

Table of Contents

1. Investing for your child: Is a custodial account too risky?
2. Comparison of custodial account providers in Switzerland
3. FAQ about investing for kids
4. Two approaches on investment goals
5. Summary

Investing for your child: Is a custodial account too risky?

With low interest rates and rising inflation, most of us can no longer avoid investing. Parking your money in a savings account that earns a mere 0.05% annually (if you’re lucky!) is insufficient when inflation sits at 2%. Your money loses value over time. To combat this, the solution lies in investing—and no, not speculatively or recklessly, but intentionally and informed. This applies to both your own retirement planning and your child’s future.

For your child’s savings, custodial accounts (junior depots) are a great option, offering ETF or mutual fund savings plans. Wondering if now is the right time to start investing? The answer is: The best time was yesterday; the second best is today!

Comparison of custodial account providers in Switzerland (2025) 

Just like with your own investments, choosing the right provider is crucial. The selection of custodial account providers is more limited, especially if you want the account in your child’s name. Most platforms, however, allow you to open a sub-account under your existing setup to invest for your child.

Here’s a quick breakdown of your options:

 *if 1.000.- are transferred or deposited within first 12 months

Top Providers

• Sustainability Winner: Inyova (offers accounts in the child’s name)
• Best Value for Money: finpension
• Lowest Fees: True Wealth

Notable Mentions

• Most providers, except findependent, also support 3a savings.
• Accounts in the child’s name are available through TrueWealth and Inyova.

Additionally, traditional banks and brokers such as Swissquote allow you to open investment accounts for your child. However, these often restrict options to mutual fund savings plans, like those offered by PostFinance, which are typically less cost-effective due to fees exceeding 1% annually.

Frequently Asked Questions about investing for kids 

Who has access to the custodial account?

Parents can choose to open the account in their name and invest on behalf of the child or directly in the child’s name. The difference lies in access rights. If the account is in the parent’s name, you retain full control and can withdraw funds at any time. However, accounts in the child’s name are legally owned by the child, and withdrawals by parents are restricted. Upon the child turning 18, the funds automatically transfer to their control.

What about taxes?

In Switzerland, a child’s income is attributed to the parents for tax purposes. This means parents must declare dividends or interest earned from the investments on their tax return. The source tax can then be reclaimed. From an administrative and flexibility standpoint, opening the account in the parent’s name often makes sense. However, if you are separated or divorced, a child-owned account may be the better option.

You can find everything you need to know about ETFs and taxes in this blog article.

How does opening an account for my child work?

The process is similar to opening an account for an adult, with the added requirement of providing information for both the parents and the child if the account is in the child’s name.

How should I invest for my child?

The approach is nearly identical to investing for yourself. As a rule of thumb: If you have at least 10 years or more until the child needs the funds, investing in stocks or equity ETFs generally makes more sense than leaving money in a savings account.

Not sure where to start with investing? Download my free "4 Rules of Investment"!

Two approaches to investment goals

1. Targeted savings: Determine how much you’d like your child to have at age 18. Then, calculate your monthly savings based on the target amount, expected returns, and investment horizon. Use online calculators to simplify this process.

2. Budget-based savings: Alternatively, assess how much you can set aside monthly without straining your finances. This might even be a good opportunity to identify unnecessary expenses—like unused subscriptions or impulse buys—and redirect those funds toward your child’s investments.

Summary: Investing for kids with stocks & ETFs 

A traditional savings account is no longer an effective way to build wealth for your child. Instead, consider a custodial account (Junior Depot) as a way to invest gifts or savings and introduce your child to the world of finance. While options in Switzerland may be limited, setting up a sub-account with your current provider can be a practical solution. Online brokers tend to offer better and more cost-effective options than traditional banks.

Ready to take the first step toward securing your child’s financial future? Now is the time to start!