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How to Save for Your Children from Birth: A Practical Guide
Key takeaways
- Time is a child's greatest investment advantage — what you have not started today cannot be made up tomorrow.
- Even 500 CZK a month invested from birth can, at a reasonable return, create a six-figure sum by age 18.
- Choosing between an account in the parent's name and one in the child's name has legal and tax implications — consulting a specialist is recommended.
- Global equity ETFs are the natural choice for such a long time horizon.
- Transparency with the child — showing them the portfolio value — builds financial responsibility.
No other gift you give a child has greater potential than the time of compound interest — and that clock starts running the day you open the first investment.
Why start from birth
An eighteen-year portfolio has eighteen years of compound interest behind it. If parents waited until the child was ten, the first eight years of the "turbo phase" of growth would be lost. Small regular amounts over a long horizon produce a result that a shorter period can never match — not even higher monthly contributions can fully compensate. Try it in our projection calculator.
What to invest in
For an eighteen-year horizon, the logical choice is a global equity ETF — for example a fund tracking the world market. Volatility over 18 years is an advantage, not a drawback: drops are an opportunity to buy cheaply. How to choose the right ETF is discussed in the guide to the world of ETFs.
- Global equity ETF — high potential, suitable for the entire horizon.
- A more conservative mix — for the last 3–5 years before turning 18, if you plan to withdraw for university.
How donors can contribute
Grandparents, godparents — instead of toys and clothes the child will outgrow, they can contribute to an investment portfolio. Even irregular one-off contributions add up. A family context around saving also teaches the child financial responsibility. More about how to talk to children about money in the article on financial education.
FAQ
Is it better to save in the parent's name or the child's name?
Both options have advantages and disadvantages. An account in the parent's name is simpler to manage. An account held in the child's name may have different tax and legal implications — for example in the case of gifting or withdrawals. Consulting a financial adviser or tax specialist is recommended.
How much per month makes sense?
It depends on your means. Even 200–500 CZK a month over an 18-year horizon at an average annual return can create a meaningful sum. The key is regularity and the longest possible horizon.
What happens to the money when the child reaches adulthood?
It depends on the account structure. Money held in the child's name becomes fully theirs at age 18. Money in a parent's account remains the parent's — they decide on the transfer. It is worth thinking through this scenario in advance and potentially formalising it legally.