Parents in Germany will soon have three ways to invest for a child: the planned Frühstart-Rente (“early-start pension”), where the state pays in €10 a month; a Junior-Depot, a brokerage account in the child’s name; or your own account, earmarked for the child. They differ mainly in who owns the money, when it can be used and how it is taxed.
This guide compares the three and works out what €10 a month can grow into. As of 25 October 2026. The Frühstart-Rente is not law yet: the Bundestag passed it on 16 October 2026, and the consent of the Bundesrat, the chamber of the federal states, is still pending.
1. Three options at a glance
| Frühstart-Rente | Junior-Depot | Parents’ account | |
|---|---|---|---|
| Who owns the money? | the child | the child | the parents |
| State money | €10 a month from age 6 to 18 | none | none |
| Access | state money from 65 at the earliest; own top-ups any time, per contract | the child alone, from 18 | the parents, any time |
| Tax while saving | none | child’s own allowances | parents’ allowances |
| Costs | effective costs capped at 1% | depends on provider | depends on provider |
2. Frühstart-Rente: status and rules
The Bundestag passed the Frühstartrentengesetz on 16 October 2026. It still needs the Bundesrat’s consent and has not been published in the Federal Law Gazette. Deutsche Rentenversicherung, the statutory pension insurer, said on 19 October 2026 that the legislative process is not yet complete. The planned start is 1 January 2027. The rules below come from the Federal Ministry of Finance FAQ (in German) on the version passed; details could still change before the law is published.
- Amount: €10 a month from the child’s 6th to 18th birthday, €1,440 in total over twelve years.
- Who: it starts with children born in 2020 and 2021; the 2020 cohort is paid back to 1 January 2026. From 2028, each cohort turning six that year joins. Children born before 2020 get nothing. The child needs a first residence in Germany; the parents’ residence and nationality do not matter.
- Account: a Standarddepot-Vertrag Altersvorsorge (the standard pension account created by the 2027 pension reform) in the child’s name, which you can open from 1 January 2027 at a certified provider. An existing children’s account does not qualify. The provider claims the money using the child’s tax ID.
- No contract opened: the Bundesbank invests the money collectively. The claim can be moved into an individual contract until age 35; otherwise it lapses.
- Costs: effective costs of at most 1 percent a year, and no sales or set-up charges on the state money.
- Top-ups: parents, grandparents or anyone else may pay in up to €6,840 a year in total. They cannot deduct this from their own taxes.
- Tax: no tax on returns while saving. Payouts from the state money are taxed in full later; on private top-ups, the gain is taxed.
The state money and its returns stay locked until 65, so it will not pay for a driving licence or university. Own top-ups and their returns can be withdrawn earlier under the contract, with the returns then taxed. From 18, the contract can continue as a subsidised Altersvorsorgedepot.
3. What €10 a month grows into
The calculation: 144 monthly payments of €10 from the 6th to the 18th birthday, nothing paid in afterwards. Returns are after costs and constant every year. The last column converts to today’s purchasing power at 2 percent inflation a year from the sixth birthday.
| Annual return after costs | At 18 | At 67 | At 67 in today’s money |
|---|---|---|---|
| 3% | €1,726 | €7,348 | €2,196 |
| 5% | €1,953 | €21,334 | €6,375 |
| 7% | €2,215 | €60,969 | €18,218 |
At 18 the compounding effect is still small. The 49 years afterwards make the difference, and the gap between 3 and 7 percent is huge. On its own, the Frühstart-Rente is not a retirement plan; it is starting capital and a prompt to talk about investing early. The Frühstart-Rente calculator lets you change return, costs and private top-ups. The compound interest calculator shows the same mechanics for any amount.
4. Junior-Depot in the child’s name
A Junior-Depot is an ordinary brokerage account registered to the child and managed by the parents. Money in it is a gift to the child and cannot simply be taken back; parents may only use it in the child’s interest. At 18 the child alone decides what to do with it, whether that is university, travel or a car.
For tax, the child is a taxpayer in their own right. They have the saver’s allowance (Sparerpauschbetrag) of €1,000, and with a non-assessment certificate (Nichtveranlagungs-Bescheinigung) from the tax office, the basic personal allowance of €12,348 (2026) also applies if the child has no other income. Investment income up to that level then stays tax-free, which covers most children’s accounts. Parents with their own investments often already use up their own allowance.
Three limits are worth knowing:
- Family health insurance: a child stays insured for free through a parent’s statutory health insurance only while their regular total income stays at or below €565 a month in 2026, one seventh of the reference value under § 10 SGB V. Investment income can count towards this. For large accounts, ask the health insurer.
- BAföG (student finance): the student’s own assets count above €15,000 for those under 30, under § 29 BAföG. Money in the parents’ account is not the child’s asset.
- Gift tax: each parent can give a child €400,000 tax-free within ten years. For ordinary savings plans this is not an issue.
5. Your own account, earmarked for the child
The most flexible option: you save in your own account and stay in control. The money can later pay for a driving licence, a first flat or university, or support the household through a hard patch. The child gets it only when you give it, at a time you choose. This also matters if your family might move country, since you keep one account under your own name and tax residence.
The downside is tax: returns count as yours and use up your saver’s allowance of €1,000, or €2,000 for a couple filing jointly. Above that, the flat investment tax (Abgeltungsteuer) applies. For a small plan the difference is minor; at €100 a month over 18 years it can become noticeable.
6. How to combine them
For children born in 2020 or later, there is a good case for taking the Frühstart-Rente once it is law and providers offer certified standard accounts: the state money is only paid there. For your family’s own money, the standard account is not automatically the best place. The 1 percent cost cap is higher than the cost of a cheap world ETF, and top-ups earn no state bonus.
An example of an extra €50 a month from birth to 18 at 5 percent after costs: it grows to about €17,263 from €10,800 paid in. Whether that money belongs in a Junior-Depot or in your own account depends on whether you trust an 18-year-old with full control, and whether student finance or family health insurance could become relevant.
First comes the question of whether the family budget has room. The guide Can we afford a child? shows how parental leave, Elterngeld (parental allowance), childcare and new costs fit together. An emergency fund matters more than a children’s account.
7. Plan it with the rest of your family budget
In Zenarios you can add children, parental leave, savings plans and accounts to one plan and see how a children’s account sits alongside a home, part-time work and retirement. The app needs no account. Its rules are simplified and do not replace tax or investment advice. Whether and when the Frühstart-Rente starts is now up to the Bundesrat; this guide will be updated once the law is published.
Work it out with your numbers
Common questions
Is the Frühstart-Rente already law?
Not yet. The Bundestag passed it on 16 October 2026, but the Bundesrat still has to consent and the law has not been published. The planned start is 1 January 2027 for children born in 2020 and 2021.
Can the Frühstart-Rente be paid into an existing children's account?
No. It is paid only into a certified standard pension account (Standarddepot) in the child's name, which can be opened from 1 January 2027. Without one, the Bundesbank invests the money collectively until the child moves it into their own contract.
Who owns the money in a Junior-Depot?
The child. Money paid in is a gift that parents may only use in the child's interest, and the child controls it alone from 18. The child's own saver's allowance and basic allowance can keep the returns tax-free.
What does €10 a month from 6 to 18 grow into?
€1,440 paid in grows to about €1,950 by 18 and about €21,300 by 67 at 5% a year after costs, before tax. At 3% it is about €7,300 at 67, at 7% about €61,000. These are illustrations, not forecasts.
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Try Zenarios in your browserWritten by the maker of Zenarios, a software engineer. These guides explain planning concepts and the product; they are not a personalized financial recommendation. Illustrative calculations are not results from your plan.