Savings for children

Would you like to secure your children’s financial situation for when they step out into adult life? We can help you get started!

Three simple steps to get started

The first advantage of starting to save for children when they’re still young is that even smaller amounts have plenty of time to grow along with the children for many years.

With regular monthly savings in an account or mutual fund, even small amounts can grow over time. Before you start saving for your children, there are some things you need to bear in mind:

1. Are you saving in the child’s or the parent’s name?

You should think about whether you want to save for the child in your name or in the child’s name. There are advantages and disadvantages to both:

Saving in a child’s name?

Advantages:

Savings are secured for the child in the event of their parents’ or guardians’ divorce, death or bankruptcy.
It’s interesting and educational for children to follow their “own” savings.
All trades on behalf of people under the age of 18 must be submitted in writing which ensures good documentation.

Disadvantages:

If the savings are in the child’s name, the child can decide what to do with the money when he/she turns 18 years old.
If the child has assets exceeding 4 G, any educational bursary from the Norwegian State Educational Loan Fund will be reduced. Read more about this on the Norwegian State Educational Loan Fund’s website.
If the child receives capital in excess of 2 G, the public administrator will help determine how the child’s savings are managed. The guardian/donor may make objections to the public administrator’s co-determination rights in a deed of gift. The objection must be given in writing at the start of the savings period. Use purchase form for people without legal capacity and tick this box.

G is the National Insurance basic amount and is adjusted annually.

As of 1st of May 2023, 1 G is NOK 118 620.

Authorisation form for transferring mutual fund shares to people without legal capacity and children.

Saving in the parents’ names?

Advantages:

Parents/guardians can freely manage children’s funds before and after the child has come of age.
You can decide at which time the child can manage their own savings, and potentially for which purpose.
By saving in the parents’/guardians’ name, the child’s possibility of getting an educational bursary from the Norwegian State Educational Loan Fund is not affected. Read more on the Lånekassen website.
It is easier to change savings choices as the overview and trading are available in the online bank for all legally competent customers.

Disadvantages:

In the event of the parents’ or guardians’ divorce, death or bankruptcy, savings for the children form part of the estate’s assets.
There is no inheritance tax in Norway (inheritance tax was removed from and including 2014), but it is likely that this tax will be re-introduced.

2. How long are you going to save for?

How long the money will stay in place can be crucial to determining which savings option you should choose. Savings for children will usually be long-term savings. If you think 10-20 years ahead, saving in an equity fund can be a sensible form of savings to consider. If you want the money to be easily accessible, savings in an account can be a good option.