Whether the money is held in your child's name or your own has different consequences for taxes, access, and availability. In your child's name, the money legally belongs to them; in your own name, you keep control.
A question almost every parent faces when saving for their child: should the money be in the child's name or your own? Both are possible, and both come with trade-offs.
So you can make this decision calmly, here are the key pros and cons, laid out clearly side by side. This is general information, not tax or legal advice. For the finer tax details, consulting a tax advisor is worthwhile when in doubt.
In the child's name
In favor: The child has their own tax-free allowances for investment returns. Returns can be lower-taxed or completely tax-free as long as they stay within those limits. The money also legally belongs to the child outright.
Against: Precisely because it belongs to the child, they can use it freely from their 18th birthday, and you have no say after that. Until then, you cannot use the money for your own purposes. A larger amount in the child's name can also affect things like student financial aid (BAföG) or free family health insurance if certain thresholds are exceeded.
In your own name
In favor: You keep full control. You decide when and for what the money is paid out, even after the child turns 18. That gives you maximum flexibility, for example if you want the money earmarked for a driver's license or education.
Against: The returns count against your own tax-free allowance, which may already be used up by other investments. The money is also legally and for tax purposes part of your own assets.
Put simply: saving in the child's name is often more tax-efficient, but you give up control. In your own name, you keep control but may pay more tax on the returns.
The real trade-off
In the end, it usually comes down to an honest weighing of priorities: how much does the tax advantage matter to you, and how much control do you want to keep? If you trust your child to handle the full amount at 18, the child's name works well. If you prefer to decide when and how the money flows, your own name is the safer choice. Some families split it and use both.
There is no universal right answer
Which option fits your family depends on the amounts, your goals, and your gut feeling. That is exactly the kind of detailed question worth working through once, calmly, ideally with a look at your tax situation.
Unsure which option fits your family?
In a free first consultation, we work through it together, clearly and without any sales pressure. For tax details, we bring in a tax advisor if needed.
Request a free first consultationFrequently asked questions
Whose name should I save in for my child?
What is the tax benefit of saving in the child's name?
What happens to the money when the child turns 18?
Can saving in the child's name affect BAföG or family health insurance?
This article is for general information and educational purposes only. It is not tax or legal advice, and does not constitute individual recommendations. Which path fits your family is something we work out together in a personal conversation, and for tax questions, together with a tax advisor.