A child investment account is a good thing. But the bigger it gets, the more rules apply. Parents should know three pitfalls before investing a lot of money in the child's name.
Pitfall 1: family health insurance
In German statutory health insurance, children are usually covered free of charge through their parents. This applies up to 18, and up to 25 during training or university. Condition: the child's total income in 2026 is below 565 € a month, i.e. 6,780 € a year.
Capital income counts, but only after deducting the 1,000 € saver's allowance. The yearly advance lump sum usually stays far below that. It gets critical on sale: selling a large account completely in one year realises the entire gain at once.
Example: with 150 € a month from birth, a taxable sale gain of about 10,900 € arises by 18. After the allowance that is about 9,900 € – more than 6,780 €. In that year, free family insurance would end.
Solution: sell in parts over several years, or simply leave the money invested as long as it is not needed. The calculator warns you if your numbers are above the limit.
Pitfall 2: student aid (BAföG)
BAföG counts the student's own assets. Under 30, 15,000 € are exempt in 2026. Anything above is spread over the funding period and reduces the aid.
A child's account with 50 € a month from birth is at about 18,675 € at 18, roughly 3,700 € above the allowance. With 100 € a month it is already about 22,000 € above.
That does not mean saving is not worth it. The counted assets are, after all, used for studying. But anyone relying on BAföG should plan for it. What counts is the assets on the day of application.
Pitfall 3: the 18th birthday
At the age of majority, the account belongs to the child alone. The parents lose all access. The child can put the money into training – or into a car or a trip around the world.
What helps:
- Talk early about the purpose of the money and involve your child, for example from the teenage years.
- Show your child how the account has grown. Those who understand compound growth often handle money more carefully.
- If you want more control, invest part of it in your own account. The comparison is in the article Child's Account or Parent's Account.
And the Early-Start Pension?
The planned Early-Start Pension is a separate retirement account and locked until retirement. It has not been passed yet. Under the draft, returns stay tax-free until payout. How it is treated for family insurance and student aid will be set by the final law. At 10 € a month, the amounts are small anyway. More in the Early-Start Pension Calculator.
Check your numbers
The calculator checks both limits automatically and shows warnings directly below the result. All information without guarantee – for health insurance questions ask your health insurer, for BAföG the student services office.