The French spare not only for them (18% of their salary on average), but also for their children. According to a yougov study of 2018, 8 in 10 parents have already set up a savings solution for their toddlers, on which they pay an average of between 30 and 50 euros per month. The proportion of booklets has “detained” by minors testifies to this attention of parents to their children: according to the Banque de France, 18% of booklets A are on behalf of a person who has not yet reached the majority, more than 10% of the total open accounts.
The favorite placement of the French in number of holders (58 million) is indeed one of the few savings products that it is possible to open before 18 years, and even, from birth. In this range, we also find the young booklet – reserved for 12-25 year olds – but whose rate varies from one bank to another, unlike the booklet A. However, in certain establishments, its remuneration can be greater than it, it can therefore be interesting to look more closely. On the other hand, you will remain constrained by a very limited ceiling: 1,600 euros, against 22,950 euros for an A book.
Open life insurance early, to benefit from your tax advantage as soon as possible
Among the other consumer savings products accessible from birth, we also find the housing savings plan (PEL) and the housing savings account (CEL), which are no longer in interest today because of their rates – lower than the booklet A -, and the fact that their interests are taxed. On the other hand, from a tax point of view, it may be interesting to subscribe as soon as possible life insurance. From the eighth anniversary of the contract, a single person can indeed withdraw up to 4,600 euros per year without taxes (9,200 euros if they are in a relationship). Also, by opening life insurance to your child at 10 years old, for example, he can withdraw all or part of the amount available from his 18th birthday, with a tax reduction that is renewed every year.
The other advantage of life insurance is that you can hope to aim for a return higher than the A booklet, by investing part of the unit of account payments (UC), more risky supports, invested in shares, bonds, real estate, etc. In 2024, UCs, for example, reported on average 4.9%, against an average yield of 2.6% for euros in euros, the part which, as on a booklet, is guaranteed without risk.
Place his children’s money on the stock market, a good idea?
To go further, it is also possible, since this Tuesday, September 30, to open a new placement so far reserved for adults from the birth of your child: the ordinary securities account (CTO), on the application of the Trade Republic Bank. A product that makes it possible to invest in the widest range of financial and stock markets (stocks, bonds, ETF, etc.). Here, no euros in euros or secure parts, the entire investment is risky. At first glance, one could be poorly advised to exhibit the money that is intended for the studies of your children, or to buy your first vehicle, housing, or other.
However, the longer the investment time – for example between 0 and 20 or 25 years -. The more you can allow yourself to take risks, because the good years on the stock market will compensate for the bad ones. This is in any case what has happened over the last 40 years, during which the investment in equities has proven to be the most profitable: 12% yield per year – despite the many crises crossed – according to the Institute of Real Estate and Land Savings (IEIF).
Faced with life insurance, the possibility of reducing costs to the maximum
In addition, a distant investment horizon, “Also makes it possible to take advantage of the compound interests”recalls Vincent Grard, director of France of Trade Republic. This is called the “snowball” effect: the interests generated each year generate interests themselves the following year, which makes capital grow in an increasingly. Which is also true for booklet A, but with a lower gain hope. According to the REPUBLIC trade estimates, 50 euros paid each month on a booklet A allows you to arrive at 12,847 euros after 18 years, against 20,399 euros by placing this money at a rate of 7%, which can be expected from stock markets over 20 years. However, be careful, because unlike booklet A, the interests of which are fully expensive, you will have to pay the single flat -rate levy (PFU or flat tax) of 30% on the gains. In this example, the net capital of taxation would therefore amount to 17,519 euros.
Finally, note that it is also possible to invest in the stock market via life insurance, which can be taken out 100% in UC, for example. But it will then be necessary to ensure that the costs retained by the insurer (management fees) and/or on the payments do not weigh too heavy over time. With a securities account, you can reduce these costs to nothing, because you manage your titles portfolio yourself, and, at Trade Republic, the payments are free if they are programmed. As a bonus, the bank has negotiated for the costs of three ETFs it offers (issued by Vanguard) are donated to the child, until he was 18, as well as “The construction of capital may not be only amputated by costs, to the withdrawal”Pointe Vincent Grard.
