ETF Savings Plan for Children: Early Beats Large
June 24, 2026
5 min read
ETF Savings Plan for Children: Why Early Beats Large
What eighteen years of head start really means — calculated, with Swiss figures.
The short version
- CHF 50 a month from birth becomes roughly CHF 21,500 by the eighteenth birthday — of which CHF 10,800 was contributed.
- The head start beats the saving effort. Those CHF 21,500 grow to over half a million by 65 without another franc going in. Starting at 18 and keeping it up until 65 lands at roughly CHF 219,000.
- Small amounts work particularly well here, because the horizon does the work. CHF 25 a month is a sensible start.
- Fees bite hardest here, because they act over the longest horizon any investment will ever have.
01What eighteen years are worth
The usual parental question is: how much should I save for my child? The better question is: when do I start? With compounding, time is the factor that cannot be bought back later.
| Monthly from birth | Contributed by 18 | Value at 18 at 7% |
|---|---|---|
| CHF 25 | CHF 5,400 | around CHF 10,800 |
| CHF 50 | CHF 10,800 | around CHF 21,500 |
| CHF 100 | CHF 21,600 | around CHF 43,000 |
| CHF 200 | CHF 43,200 | around CHF 86,000 |
Model calculation at a 7% gross return with monthly compounding. No guarantee, no forecast. Actual results vary considerably.
In every row the contributed amount has roughly doubled. That is not yet spectacular. What comes next is.
02The calculation that surprises parents
Take the CHF 21,500 that came from CHF 50 a month. The child is eighteen. From here nobody contributes anything — the money simply stays invested until 65.
Eighteen years of head start against forty-seven years of discipline
Option A: CHF 50 a month from birth to 18, then nothing ever again. At 65: around CHF 518,000.
Option B: Start at 18 and keep CHF 50 a month going until 65 — forty-seven years. At 65: around CHF 219,000.
Option B contributes almost three times as much and ends with less than half. The only difference is when it started.
That is the real reason to open a children's portfolio early. Not because CHF 50 a month is a lot of money, but because those eighteen years are unavailable later at any price.
03Why fees matter more here
A children's portfolio has a longer horizon than any other investment a person makes. But a fee does not act linearly — it reduces the amount that compounds in the following year, every year.
Two consequences. First: choose the cost side deliberately, because it may act over sixty years. Second: watch for fixed fees per execution. Contributing CHF 25 a month with a fixed charge per purchase loses a substantial share of every contribution before anything is invested. More in What is the minimum amount for a savings plan?.
04What applies in Switzerland
Capital gains are tax-free. The portfolio's appreciation is not taxed as income. What is taxable is the portfolio value and the income.
A minor's assets are declared by the parents, and the income generally flows into the parents' tax return.
At eighteen the money belongs to the child, fully and without conditions. That is not a drawback, but it is a fact worth thinking about in advance — and discussing with the child later.
Pillar 3a is not open to children without earned income subject to social security. An unrestricted portfolio is therefore the only way to start early.
05How to start in practice
1. Pick an amount that survives a bad yearCHF 25 consistently beats CHF 100 with gaps
2. Set up a standing orderthe day after salary lands
3. Let gifts flow inchristening, birthdays, Christmas
4. Do not check every yearthe effect shows in the second decade
The arvy children's account
We built something specifically for this: the arvy children's account. Broadly diversified, invested weekly, with no fixed fee per execution — so that small amounts are invested in full. More on the topic in the child portfolio section.
06Frequently asked questions
What is the minimum amount worth saving for a child?
As long as there is no fixed fee per execution, there is no lower bound — CHF 25 a month is a sensible start. What matters is not the size but the horizon. Where a fixed charge applies per purchase, the sensible minimum rises considerably.
What happens to the money when the child turns 18?
It belongs to them, in full legal terms. Many parents transfer the portfolio and stay involved in an advisory role. It helps to talk about money early rather than postponing the question until the eighteenth birthday.
Do I have to declare a child's portfolio on my tax return?
Yes. While the child is a minor, their assets are generally declared by the parents, as is the income. Capital gains remain tax-free for private investors. The exact handling differs by canton.
Can I pay into Pillar 3a for my child?
Only if they have earned income subject to social security contributions, which is not the case for young children. Until then an unrestricted securities portfolio is the only way to put compounding to work early.
Is an equity portfolio too risky for a child?
The risk of an investment depends heavily on the horizon. Over eighteen years and more, broadly diversified equity investments have very rarely ended negative. Not investing is considerably riskier — then the loss of purchasing power is certain.
Savings account or securities portfolio?
Over an eighteen-year horizon a savings account works against you, because inflation erodes purchasing power faster than interest builds it. A portfolio fluctuates in exchange. Anyone who cannot sit through that should keep part of it in cash.
Keep reading
Those eighteen years happen once
The arvy children's account invests even small amounts in full — no fixed fee per execution.
This article was written by Thierry Borgeat, co-founder of arvy, and reviewed by Patrick Rissi, CFA, and Florian Jauch, CFA.
Disclaimer: arvy AG is a manager of collective assets authorised by FINMA under Art. 24 CISA. This article is for information purposes only and constitutes neither investment advice nor tax or legal advice. All amounts are indicative and depend on canton, municipality and personal circumstances. Past performance is not a reliable indicator of future results.
