The shift from savings books to stock portfolios

For decades, the standard way for Swiss parents to save for their children's future was the traditional savings book (Kindersparheft or Kindersparbuch). However, in today's financial climate, leaving money in a cash account for 10, 15, or 18 years is a guaranteed way to lose purchasing power. With interest rates on junior savings accounts hovering between 0.25% and 1.00%—often below the rate of inflation—cash is no longer a viable long-term strategy.

When saving for a minor, you have one massive advantage: a long investment horizon. A newborn child has 18 years before they can legally access the funds. Over this time frame, short-term stock market volatility flattens out, and the compounding effect of equities becomes incredibly powerful. Investing in a diversified stock portfolio historically yields 5% to 7% per year, which can turn a modest monthly contribution into a substantial financial head start.

For example, contributing CHF 100 per month over 18 years at a 6% annual return results in a total portfolio value of approximately CHF 38,000, of which over CHF 16,000 is interest and investment growth. The same amount left in a savings account at 0.50% interest would grow to just CHF 22,000. To bridge this gap, parents should look at junior investment accounts (Junior Depots) or automated ETF savings plans.

How junior investing is taxed in Switzerland: Rules for parents

Before opening an account, it is critical to understand Swiss tax laws regarding minors. In Switzerland, minor children are not treated as separate tax entities. Consequently, children do not file their own tax returns. Instead, the law requires parents to declare all assets and income of their minor children on their own tax return.

This tax treatment has two main implications:

1) Wealth Tax (Vermögenssteuer): The total capital in the child's investment or savings account must be declared as part of the parents' wealth. While wealth tax rates in Switzerland are relatively low (ranging from 0.05% to 0.5% depending on the canton and municipality), the assets are added to your taxable base. You can review cantonal wealth tax rates in our guide to the Swiss wealth tax for expats.

2) Income Tax on Dividends (Einkommenssteuer): Any interest or dividends earned by the child's investments must be declared as part of the parents' taxable income. In a progressive tax system, this means the child's dividends are taxed at your marginal tax rate, which can be as high as 25% to 40% for high-earning expats. To check your canton's progression, consult our cantonal tax comparison guide.

This tax reporting continues until the end of the calendar year in which the child turns 18. From that point on, the young adult becomes a separate taxpayer, files their own tax return, and usually falls into a 0% or very low tax bracket due to low initial income. The transfer of the assets itself at age 18 is tax-free because the funds legally already belonged to the child.

Best junior investment accounts in Switzerland: Broker vs. Robo-Advisor

Parents looking to set up a Junior Depot have two main options: digital robo-advisors or self-directed brokerage accounts. The choice depends on whether you want an automated hands-off solution or want to select individual ETFs yourself.

1) True Wealth (Junior Depot): This is one of the most cost-effective and popular options in Switzerland. True Wealth offers a dedicated account for children with a unique incentive: the management fee is 0.00% (completely free) for portfolios up to CHF 10,000. For portfolios exceeding CHF 10,000, the fee is a competitive 0.50% per year. The account is opened in the child's name, and the portfolio is automatically invested in low-cost passive index funds and ETFs based on the child's risk profile. You can compare robo-advisor structures in our Swiss robo-advisors expat guide.

2) Swissquote (Junior Depot): For parents who want full control and prefer to manually buy specific ETFs, Swissquote is the leading Swiss provider. They offer a dedicated junior account. While Swissquote provides the safety of an established Swiss bank with a full banking license, its transaction fees are higher than robo-advisors. Standard trades cost between CHF 5 and CHF 9 (plus stamp duties and exchange fees), making it more suited for lump-sum investing rather than very small monthly transactions. Compare Swissquote's trading costs in our Swiss broker vs international broker guide.

3) Selma & Findepend: Selma Finance offers a customized 'Selma for Kids' portfolio with automated management and a fee of around 0.47% to 0.68% depending on the volume. Findepend also offers junior accounts with a fee-free limit on the first CHF 2,000, and a flat 0.44% management fee thereafter. Both are great options for parents who want a simple, smartphone-based automated savings plan.

The DIY alternative: Informal trust accounts via international brokers

Some parents choose a third, more hands-on path: opening a standard brokerage account with a low-cost international broker (such as Interactive Brokers) and Earmarking it for the child. This is often referred to as a Do-It-Yourself (DIY) informal trust account.

The main benefit of this approach is fee optimization. International brokers have virtually zero management fees and extremely low transaction costs (e.g., under USD 1 to buy US-domiciled ETFs). Parents can buy highly tax-efficient US ETFs (like Vanguard VT) which suffer from zero dividend tax leakage if you claim the withholding tax back via the DA-1 form. Learn how this works in our guide on reclaiming US withholding tax with the DA-1 form.

However, this setup has legal and administrative drawbacks. The account is legally in the parent's name. This means there is no automatic transfer of ownership at age 18. Earmarked accounts require parents to keep meticulous records to distinguish the child's assets from their own, especially for tax declarations. Furthermore, transferring the assets to the child later could trigger cantonal gift taxes if the amount exceeds the lifetime allowance (though most cantons exempt direct descendants from gift tax). Check our guide on Swiss inheritance and gift tax rules for expats for cantonal limits.

Investment strategy: Setting up a winning child portfolio

If you decide to invest for your child, consistency and diversification are the keys to success. A successful child portfolio should follow these principles:

1) Choose 100% Equities: Because the investment horizon is extremely long, you can afford to take maximum equity risk. Bonds or cash will only drag down returns over 15+ years. A portfolio of 90% to 100% global stock ETFs is appropriate.

2) Automate with standing orders: Set up a monthly standing order from your bank account to your junior investment platform. This automates the process and takes advantage of dollar-cost averaging, buying more shares when prices are low and fewer when they are high.

3) Select global, low-cost ETFs: Stick to broad index funds. Excellent choices include ETFs tracking the MSCI World, FTSE All-World, or a total world index. Avoid thematic or regional ETFs (like robotics, clean energy, or individual country funds) which introduce unnecessary risk. Read more in our guide to ETF investing in Switzerland.

4) Keep traditional savings for short-term goals: Earmark the investment portfolio strictly for the child's transition to adulthood (e.g., university, buying a home, starting a business). For short-term expenses, like school trips or hobbies, use a regular bank account. Review the best bank accounts for Swiss expats to organize your family's daily banking.