First: What is the difference between a Sparbuch and an ETF-Depot?
| Criterion | Sparbuch (savings book / savings account) | ETF-Depot (investment account for ETFs) |
|---|---|---|
| Expected return | Very low (0.01–1%) | Higher in the long term (on average 6–8% per year) |
| Risk | Almost zero | Medium, depending on the market, but more stable with broadly diversified ETFs |
| Flexibility | Easy withdrawals, but sometimes with monthly limits | Flexible, but ideally withdrawals should be made after several years to maximise returns |
| Fees | Usually free | Some fees for trading or portfolio management |
| Security | Guaranteed up to 100,000 € via deposit insurance (Einlagensicherung) | Subject to market fluctuations, but assets are held separately from the bank’s own funds |
| Ease of understanding | Very easy | Requires a basic understanding of investing, or use of simple pre-set ETF saving plans |
Second: Tax advantages for children in Germany
Every child in Germany has the following tax allowances:
Allowance for capital gains (from 2025):
Around 1,200 € per year (Sparer-Pauschbetrag).
Allowance for general income:
In 2025: around 11,604 € per year (Grundfreibetrag).
This means:
A child can have an ETF-Depot in their own name. As long as the child’s investment income (dividends + capital gains from selling) remains within these limits, no taxes will be due on these earnings.
Tip:
If you invest, for example, 50 € per month in a global ETF (such as an MSCI World ETF), it is unlikely that the child will exceed these tax-free limits over a full decade or more, especially in the early years.
Third: How can you make use of these advantages?
Open an ETF-Depot in the child’s name, not in the parent’s name.
Set up a monthly savings plan (Sparplan) in low-cost, globally diversified ETFs.
Use banks and brokers such as Trade Republic, Scalable Capital, ING, which allow accounts for minors in cooperation with one or both parents.
Example calculation (child from age 0 to 18):
| Scenario | Amount invested per month | Expected return | Result after 18 years |
|---|---|---|---|
| Sparbuch | 50 € | 1% | ~12,000 € |
| ETF-Depot | 50 € | 8% | ~22,000 € |
The difference can be 10,000 € or more, purely due to choosing a smarter investment vehicle!
When is a Sparbuch preferable?
If you only want to save a small amount that you can access quickly at any time.
If the parents do not want to take any risk at all, even a moderate one.
Conclusion:
If you are thinking long term:
➤ An ETF-Depot in the child’s name is generally the better choice financially and from a tax perspective.
If you only want a simple, safe and guaranteed account with no market fluctuations:
➤ A Sparbuch is acceptable, but it will not significantly grow the money over time.
The writing and editorial team of the website strives to provide accurate information by conducting thorough research and consulting multiple sources when preparing articles. However, errors may occur, or some information may be incomplete or not fully verified. Therefore, the information provided in these articles should be regarded only as an initial point of reference. For definitive and legally binding information, you should always consult the relevant authorities or qualified professionals.
