Let start with looking at a savings account first. Currently in Europe interest rates on savings accounts are not high at all. I’ve looked at BNP Paribas Fortis and they offer a savings plan for children on which they currently guarantee an annual yield of 0.5%. Normally it should be higher, apparently the actual yield in 2018 was 2.0%. They do charge quiet high fees of 3.5% every time you put money into the account though. the last couple of years these fees go down but for the vast majority of time you’d pay 3.5%. You also have to pay 2% insurance tax on every deposit. The 2% is on the whole deposit amount before the 3.5% deposit fee.   If you would save €25 each month for 18 years the total amount saved would be €5400. If we would put our money in the BNP Paribas Fortis child savings plan best case scenario we get 2.0% each year. Taking into account the fees we would pay on our deposits, we would end up with €6188.90. This is already a little bit better. if you would take the worst case scenario where the annual yield would only be the guaranteed 0.5% you would end up with a whopping €5391.00. THIS IS LESS THAN IF YOU WOULD HAVE PUT YOUR MONEY UNDER YOUR MATTRESS. Here is a little recap on the expected return on a savings account for you child where you would save €25 each month:

• 18 years of 0% annual yield: €5400
• 18 years of 0.5% annual yield: €5391.00 (worst case scenario)
• 18 years of 2.0% annual yield: €6188.90 (best case scenario)