Get informed about gift accounts to save money for a child and compare gift accounts for children from major Swiss banks.
Whether out of awkwardness, pragmatism, or simply because they want to, many Swiss choose to gift money to their children, grandchildren, or godchildren on special occasions.
To enable people to gift children money in a way that encourages saving, Swiss banks offer gift accounts for children. A gift account is opened and managed by an adult, but the account is nominally in the child’s name, and the money is designated for the child.
What are gift accounts used for?
By opening a gift account in which to deposit your financial gifts, you ensure that your child, niece or nephew, grandchild, or godchild, will only receive the money when they reach a certain age. The idea is that the child will use the money, including interest earned, in a more sensible way when they are older.
For example, the money could be used to help pay for the child’s education.
How secure are Swiss gift accounts?
Gift accounts are just as secure as other Swiss bank accounts. If the bank were to go bankrupt, the account balance would be covered by Swiss bank depositor protection, up to a maximum of 100,000 francs per bank and customer.
When is the account transferred to the child?
The gift account is officially transferred to the child as soon as the child reaches a predefined age. At a lot of Swiss banks, the transfer of ownership happens automatically when the child reaches the age of 18. Other banks let you choose the age for the account transfer.
Many Swiss banks provide you with a special gift certificate that you can give to the child when the account is transferred to them.
Until the child reaches the required age, only authorized adults are able to access the money in the account and deposit money into the account. The child cannot make any withdrawals.
Can I withdraw money from gift accounts that I open?
Each bank has its own rules governing whether adults can withdraw money from gift accounts that they manage. Some banks require you to justify the withdrawal, or even to prove how the money is spent. Some banks will deny withdrawals that are not in the child’s best interest.
The legal status of gift accounts is unclear, and each bank interprets the rules differently. The basic rule is: If an account is opened for a child, the account balance should belong to the child.
Does the money belong to the child?
From a legal standpoint, the money in a gift account is part of the estate of the adult who manages the account. If you die before the child reaches the required age for the account transfer, the child will only receive the money if you specifically leave that amount to them in your will, in keeping with Swiss inheritance rules.
How much interest do banks pay for gift account balances?
Gift accounts are a type of savings account. As with other savings accounts, there are no basic, ongoing account fees. The interest rates are normally identical to those of youth savings accounts.
As with youth savings accounts, interest rates vary considerably between banks. Comparing savings accounts before you open a gift savings account is a good financial move.
Overview of annual interest rates for gift accounts from major Swiss banks:
| Bank | Annual interest rate |
|---|---|
| Bank Cler | 1% up to CHF 25,000, and 0.80% for the portion of the account balance that exceeds CHF 25,000 |
| Banque Cantonale de Genève | 1% for up to CHF 25,000, and 0.25% for the portion of the account balance that exceeds CHF 25,000. 0% for the portion of the account balance that exceeds CHF 100,000. |
| Basellandschaftliche Kantonalbank | 1% for up to CHF 20,000, and 0.50% for the portion of the account balance that exceeds CHF 20,000. |
| Basler Kantonalbank | 1% for up to CHF 20,000, and 0.65% for the portion of the account balance that exceeds CHF 20,000. |
| Berner Kantonalbank | 1.25% for up to CHF 10,000, and 0.75% for the portion of the account balance that exceeds CHF 20,000. |
| Luzerner Kantonalbank | 1.25% for up to CHF 20,000, and 1% for the portion of the account balance that exceeds CHF 20,000. 0.90% for the portion of the account balance that exceeds CHF 100,000. |
| Migros Bank | 1.25% for up to CHF 25,000, and 0.75% for the portion of the account balance that exceeds CHF 25,000. 0% for the portion of the account balance that exceeds CHF 100,000. |
| Raiffeisen* | 0.85% for up to CHF 20,000, and 0.75% for the portion of the account balance that exceeds CHF 20,000. |
| UBS | 1% for up to CHF 50,000, and 0.30% for the portion of the account balance that exceeds CHF 50,000. |
| Zuger Kantonalbank | 1.1% for up to CHF 25,000, and 0.5% for the portion of the account balance that exceeds CHF 25,000. 0% for the portion of the account balance that exceeds CHF 200,000. |
| Zürcher Kantonalbank | 1.1% for up to CHF 50,000, and 0.25% for the portion of the account balance that exceeds CHF 50,000. 0% for the portion of the account balance that exceeds CHF 250,000. |
* Raiffeisen Zurich. Interest rates may vary between different Raiffeisen banks.
Investing for a child as an alternative to saving
Gift investment fund accounts and fund savings plans are also offered by some Swiss banks.
Money placed in an investment fund account is invested in a fund that, in turn, invests in various securities like stocks and bonds. Investment fund accounts are riskier than savings accounts – at least over shorter terms – because financial markets can experience strong fluctuations. But the returns you can potentially earn if investments perform well are much higher than the interest you earn with savings accounts.
The rule of thumb is: Only use a gift investment fund account for your child if the money will remain in the account for a long time – ideally for at least 10 years.
The guide to Swiss fund savings plans provides useful information and a comparison of fund savings plans (as a free PDF that you can receive by email). The comparison also shows which fund savings plans can be used as gift plans for children.
More recently, neobanks have also begun to offer gift solutions for children. Swiss robo advisor True Wealth is one example: As a legal guardian, you can open an asset management portfolio based on ETFs for children between the ages of 0 and 17 years old, with a minimum initial deposit of 1000 francs. The advantage is that the costs are typically lower than those of conventional investment products.
More on this topic:
Swiss fund savings plans explained
Compare Swiss savings accounts now
Swiss bank accounts for children and teens explained
Financial education for children: Ideas and tips
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