Kids' Infatuation with: Exploring the Reasons Behind Every Child's Adoration

In the ever-evolving world of finance, a new trend is emerging - investing in children's future. This approach, endorsed by Ralf Scherfling from the North Rhine-Westphalia consumer center, is gaining traction, with brokers like Trade Republic leading the way.

Trade Republic, a relatively new player in the market, is attracting new customers, particularly 18-year-olds, who are eager to invest their money and continue their relationship with the broker. The broker is offering a 100 euro bonus in stocks for every new children's account opened this summer, a move that Christian Hecker, co-founder of Trade Republic, is proud of. He sees it as a response to the "unsure pension system" and the need for early retirement provision in a country where fewer people can live well on the statutory pension alone.

However, Scherfling warns that situations might arise where children receive nothing on their 18th birthday if the parents or grandparents have to file for personal bankruptcy or face care cases, and the securities in the account belong to them legally. This underscores the importance of careful consideration when choosing investments for children's accounts.

Trade Republic is not the only broker offering children's accounts. BNP Paribas (formerly Consorsbank) has had a deposit for minors since 1998, although the exact number of children's accounts cannot be determined. Out of the total of 1.75 million accounts at BNP Paribis, a "small six-figure number" belongs to minors. Comdirect has had its Junior Depot since the end of 2001, with the number of accounts more than tripling in the past ten years. ING has been offering its Junior Direct-Depot for 15 years, although the exact number of accounts is not disclosed.

Scherfling approves of these brokers, along with Trade Republic, for allowing customers to manage children's accounts in the child's name. However, he advises thinking about suitable securities like ETFs for children's accounts, as they provide a higher return compared to a savings plan with a bank. Gold and cryptocurrencies, considered risky investment products for children's accounts by consumer advocates, are typically devoid of income in the form of interest or dividends, and rely on price gains and potential currency gains. Cryptocurrencies like Bitcoin are seen as speculative investments, rather than strategic ones.

The cryptocurrency hype should not lead to children's accounts being filled with such titles, according to Scherfling, to maintain harmony between consumer protection and providers in the area of children's accounts. If parents or grandparents file for personal bankruptcy or face care cases, creditors' claims might have to be satisfied, potentially leaving children with no securities.

In conclusion, investing in children's future is a promising trend, with brokers like Trade Republic, BNP Paribas, Comdirect, and ING Diba leading the way. However, careful consideration is needed when choosing investments, with ETFs being a recommended option for long-term savings due to their higher returns compared to bank savings plans.