Thursday, July 07, 2005

Investing for Baby

As part of the direct mail that keeps popping through the mailslot since Peanut arrived, I received some information from Sampo about opening savings and investment accounts for baby.

I had to smile at the headline ... Save up for such things as your child's drivers license... just because it seems like such a small item and when I think of investing for baby, I'm thinking like a sum that would pay for her to go to Harvard ;-)

Sampo has four investing options and bundles them with convenient reminders and gift cards for special occasions such Birthday, Name Day and Christmas. You can even have an auto-debit on the specific days to move money into the savings account.

Briefly the four options are:
> Kultapossu - Golden Piggy Bank account - basic account which can be opened by parents, godparents or other relatives, all which can make any domination deposits into the account whenever. The child can use the account with their parents permission.

> Kultapossu Säästötili - Golden Piggy Bank Savings account - has a higher interest rate than the basic account. Like the previous account, several people can make deposits whenever they wish. Another difference is that the child cannot access the account until age 18.

> Kultapossu Rahastot - Golden Piggy Bank Funds - Again several different people can make deposits, but the smallest amount allowed is 30 EURS. There are three maturation date options: more than 5 yrs, 3 - 5 yrs and more than 2 yrs. More details on their website

> Kultapossu Sijoitusvakuus - Golden Piggy Bank Investment Insurance account - the smallest opening balance is 2000 EUR and requires a 50 EUR deposit monthly. The gift giver manages the account for the duration for the agreement. This is suggested as a tax efficient way to transfer wealth.

General Tax Guidelines for Monetary Gifts for Baby

TAX FREE a total of 3,399 EURs over three years
> from a single gift-giver to a single recipient
> breaks down to 94EUR/month, 188 EUR/bi monthly or 566EUR/ twice a year

TAX FREE into an Investment Insurance account an additional 8,500 EUR over three years:
> a total of 11,899 EUR (the above + 8,500) can be given tax free
> the gift giver must be a relative

If you want to give more, there will be gift tax to pay - by the girecipientint. The amount will be determined by the relationship between giver and recipient over the entire gift amount.

More tax info from our friends at

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