This is how you and your children get the most out of child savings

If you can afford to set up a child savings plan for your child, they may be a good idea to do so as it can help give your child a more secure start to his adult life and a better economy. The money can cover, for example, the cost of furniture, a deposit for an apartment, study books, paying a driver’s license or something else entirely.

However, when you create a child savings plan, it doesn’t matter where you choose to create the savings or how you pay for them. We will elaborate on this in the following article.

Choosing a bank


When you set up your child’s child savings, it doesn’t really matter which bank you have. There is a big difference between how much interest you can get on the child savings, which affects how much the money can give in return over the life of the account.

The highest interest rate at present. is given at 1.5%, available from Lån & Spar Bank and Sparekassen Sjælland. If necessary, contact your bank to find out more about how much you can get in interest on your child savings.

The rules for child savings


A child savings plan must be created before the child reaches the age of 14 and must be listed in the child’s name. The savings must only run until the child reaches the age of 21. After that, the money must be raised and deposited into another account. It is free for anyone to put money into the savings, so the payments can be made by parents, grandparents, other family members or other acquaintances.

There are certain rules for child savings that one must adhere to. It is not allowed to deposit more than USD 3,000 a year for child savings, nor is the total amount paid into the savings exceeding USD 36,000.

If you want to get the most out of your child savings, you should deposit the maximum amount of savings as soon as possible. In this way, the money has the opportunity to give the highest return on interest, and in this way you will get more money out of the savings. Because of the rules that you can only pay 3,000 a year, the fastest you can deposit the USD 36,000, over 12 years.

If you have paid the maximum amount

If you have paid the maximum amount

When the child reaches the age of 12, when the child raises the savings when it reaches the age of 21, with an interest rate of 1.5%, you could get such a large return on interest that there will be USD 45,500 in the account. So significantly more than the 36,000 kroner which is actually the account’s max.

A good thing is that you are not required to pay tax deductions on a child savings, nor are you obliged to pay tax on the return earned through interest, dividends or exchange rate gains.

Another option is that you can also invest in child savings to get more money. You can either choose to invest the entire savings amount, or just a portion of it. The most important thing is that the custodians are created in the child’s name.