The model calculation is based on an average return of 7.5 percent per year – based on the historical development of the MSCI World stock index minus ETF costs.

This creates almost 140,000 euros from 259 euros

Who the complete Child benefit for 18 years invested, deposits a total of around 70,800 euros. According to Verivox, through price gains and the compound interest effect, the portfolio will grow to around 139,000 euros by the time you turn 18. After deducting the withholding tax and solidarity surcharge, around 126,000 euros remained after a sale.

The calculation also assumes that child benefit – as on average over the past 25 years – will increase by 2.7 percent annually and that more will be invested accordingly. Verivox managing director Oliver Maier speaks of an “extraordinarily solid financial starting point” if parents start early and leave the money untouched.

• At 30 years old it would already be around 331,000 euros.
• After 50 years, the amount increases to around 1.4 million euros
• At the age of 67, the sum would be around 4.8 million euros

Even after taxes, according to the model, it would still be around 3.9 million euros. The million mark would therefore be exceeded by the age of 46 – without any contributions from the child.

However: These values ​​are not a guarantee. Stock markets don’t move in a straight line. Intermittent price drops are part of this. In the long term, markets have historically always recovered. But investors have to be able to withstand fluctuations.

Child benefit invested up to 25: The turbo effect

The entitlement to child benefit exists until the child turns 18, but continues if the child is still studying or training. If the child benefit is invested until the age of 25, the compound interest effect increases significantly.

In a model calculation with a moderate increase in the savings rate and 7.5 percent average return, the portfolio grows to around 290,000 euros by the person’s 25th birthday – even though significantly less was paid in. A large part of wealth is created through time alone.

If this capital then remains untouched and continues to work on the stock market, it could be used mathematically until the age of 67 Assets of around six million euros become.

However, such calculations are based on long-term average returns. If the annual return is just one or two percentage points lower, the final assets will shrink by several million euros. This is precisely why the return assumption is the crucial – and most uncertain – factor in such calculations.

Even 50 euros can make a big difference

But not every family can invest the entire child benefit. But even smaller amounts are worth it. Consumer advocates and financial advisors have been emphasizing for years: time is of the essence.

Anyone who only invests 50 euros a month and achieves an average return of six percent will have just under 20,000 euros by the time their child turns 18 – even though only 10,800 euros have been deposited. If the deposit is continued into adulthood, it can amount to several hundred thousand euros.

Financial advisors also recommend investing one-off amounts – for example from grandparents – directly and then continuing to save regularly. This is how the so-called cost averaging effect can be used: By keeping savings rates constant, you buy more shares when prices are low and fewer when prices are high.

What name should the depot be under?

An often underestimated question is tax structuring. If the deposit is in the child’s name, their personal tax allowances can be used – significantly higher than for the parents. Capital gains above the saver’s flat rate are otherwise taxed at 25 percent withholding tax plus solidarity surcharge, and if necessary also church tax.

However, the money then legally belongs to the child. At the age of 18, you can dispose of it freely. Parents can manage the depot, but cannot simply use it for their own purposes. A subsequent “retransfer” can become a dispute.