The Best Deposit Accounts for Youth in Switzerland: Maximizing Savings for the Future

Setting aside capital for the future of one's children, grandchildren, or godchildren is a common goal for many families in Switzerland. Deposit Accounts specifically dedicated to youth and minors are often the first and safest step in this direction.

But how do they differ from standard accounts? What advantages do they offer, and what alternatives exist? Let's find out together.

Dedicated Deposit Accounts: What They Are and How They Work

"Deposit Accounts for Youth" (often called "Youth Savings Account" or similar) are specific banking products designed to encourage saving in minors under 18 years old or young adults under 25 years old.

Their distinguishing feature is that they offer significantly more advantageous conditions than standard deposit accounts, particularly regarding the interest rate.

Highlighted Swiss Offers

Some Swiss banks offer particularly attractive solutions for this customer segment, often with preferential rates. Two examples that stand out among the range of offers are Cembra Money Bank and Migros Bank:

Bank	Target Audience	Main Advantage
Cembra Money Bank	Under 18	Preferential rate, clear Minimum/Maximum Deposit.
Migros Bank	Under 25	Favorable rate and high flexibility (short restriction).

Note: The interest rates indicated are for illustrative purposes only and may not be up to date. Always consult the comparator for current conditions.

Advantages (Pros) of Deposit Accounts for Youth

Opening a deposit account specifically designed for young people offers numerous benefits for parents and the young account holders:

1. Preferential Interest Rates: The main advantage is a significantly higher return rate compared to standard savings or deposit accounts. Banks use these offers as a strategy to build customer loyalty from a young age.

2. Zero (or Minimal) Costs: Most of these accounts are exempt from management and account maintenance fees, maximizing the accumulated capital.

3. Security and Guarantee: Like all deposit accounts in Switzerland, they are covered by the deposit guarantee system up to 100,000 CHF per client per bank.

4. Financial Education: They allow young people to become familiar with the concept of saving, compound interest, and money management.

5. Taxation (Withholding Tax): Although subject to Swiss Withholding Tax, this is only applied to interest exceeding 200 CHF per year. For youth savings accounts, this threshold is often not reached, reducing the immediate tax burden.

   • Further Reading: For more details on taxation, read our guide on What Taxes Are Paid on Deposit Accounts?

   
   

Limitations (Cons) Compared to Standard Accounts

Although advantageous, these accounts have some limitations compared to deposit accounts for adults:

1. Limited Maximum Amounts: The preferential rate is usually applied only up to a certain amount (e.g., CHF 20,000 or CHF 50,000). Beyond this threshold, the rate drops drastically, or the standard rate applies.

2. Parental Control: Accounts for minors are opened under parental authority, and complex withdrawals or transactions often require parental authorization or intervention, ensuring security but limiting the young person's autonomy.

3. Restrictions or Withdrawal Limits: Some accounts may impose short restriction periods or monthly withdrawal limits, beyond which penalties apply.

Deposit Account vs. Long-Term Investments: The Parents' Choice

For a parent or guardian who wishes to secure a significant return for their child upon reaching adulthood, the deposit account is the safest option, but not necessarily the one with the greatest growth potential.

For time horizons of 15–20 years (from birth to adulthood), parents can consider alternatives that better utilize compound interest and the long duration.

1. Fund Savings Plans (ETFs and Index Funds)

• How It Works: Parents regularly invest (e.g., CHF 50 or CHF 100 per month) in Index Funds or ETFs (Exchange Traded Funds) in the minor's name.

• Advantages: Historically, stock markets offer significantly higher returns than deposit account interest rates. Diversification reduces risk in the long term.

• Disadvantages: Involves market risk: the capital can fluctuate and decrease in value.

• Ideal for: Parents who accept moderate risk in exchange for a potentially much higher return and have a long time horizon.

  • Further Reading: Consult our Investments and Savings section to discover the best instruments.

2. Online Current Account for Daily Management

The deposit account is not a daily management account. Often, older youth (16–25 years old) also need a free Online Bank Account that allows payments, transfers, and the use of a debit card (often with spending limits controlled by parents). This instrument is complementary to the deposit, not a long-term savings alternative.

Conclusion: The Balanced Approach

The best choice for a young person's financial future is often a combined approach:

1. Youth Deposit Account: Used for secure saving and initial financial education, taking advantage of preferential rates on the initial capital.

   • Action: COMPARE DEPOSIT ACCOUNTS NOW to find the best youth rate.

2. Fund Investment Plans: Used by parents to regularly invest the surplus, aiming for long-term capital growth.

In any case, the most important thing is the regularity of deposits. Even small amounts, thanks to the power of compound interest and time, can make a difference upon reaching adulthood.