Saving money for a child from their earliest years is one of the best financial decisions a parent can make. Compound interest means that even small amounts saved regularly over 15–20 years grow into significant sums. In this article we cover the options available in Poland — from the simplest to more advanced.
Why it pays to start early
Compound interest means that interest added to the capital starts earning interest itself. The longer the horizon, the stronger the effect. Example:
- Saving 200 PLN a month for 18 years at a 5% annual return builds up to about 68,000 PLN.
- If you only start when the child is 10 (8 years until adulthood) — with the same monthly amount you would accumulate about 25,000 PLN.
The difference is over 43,000 PLN — purely from starting earlier.
Children's savings account
The simplest solution. Many Polish banks offer children's savings accounts with slightly higher interest than standard accounts. Advantages: full liquidity, no risk, money available at any time. Drawback: interest rarely beats inflation, especially after the 19% "Belka tax" on interest is deducted.
This works well as a fund for the child's "everyday needs" or as a temporary parking spot for money before you decide on a longer-term option.
Bank term deposit (lokata)
A term deposit is a fixed-term agreement with a bank (e.g. 3, 6, 12 months) with guaranteed interest. Funds on a term deposit in Poland are protected by the Bank Guarantee Fund (BFG) up to the equivalent of 100,000 EUR. Drawback: breaking the deposit early usually means losing the interest.
A term deposit works well for a short horizon (1–3 years) or when you know exactly when the money will be needed.
ROS family treasury bonds
ROS bonds (6-year family treasury bonds) are available only to recipients of the 800+ child benefit. The interest rate is fixed in the first year, and in following years it is tied to inflation plus a margin. They are inflation-indexed, meaning real protection of your capital's value. They can be purchased via the obligacjeskarbowe.pl portal.
Treasury bonds are backed by a State Treasury guarantee, making them one of the safest forms of saving.
PPO — a Children's Treasury Bond Savings Plan
PPO is a program enabling systematic investment in treasury bonds with bonuses for regular contributions. It is aimed at families wanting to build a long-term financial cushion for their child. Check current terms and availability at obligacjeskarbowe.pl, as the rules may change.
ETFs — investing for the very long term
For parents with a horizon of 15+ years who accept market risk, ETFs (Exchange Traded Funds) tracking equity indices have historically delivered returns well above inflation. ETFs can be bought through a brokerage account or an IKE brokerage account. Important: investment value can fluctuate, and past results do not guarantee future returns.
The minimum entry threshold is low (even a dozen or so zloty per ETF unit). Regular monthly purchases (the "DCA" — dollar-cost averaging — strategy) reduce the risk of poor market timing.
How to start — practical steps
- Define a goal: university, a flat, a start in life?
- Set a horizon: how many years until the child will need the money?
- Choose your tools: short horizon (up to 5 years) — a term deposit or bonds; long horizon (10+ years) — bonds plus ETFs.
- Start with small amounts — 50–200 PLN a month is a good enough start.
- Automate transfers so you don't forget.
Calculate how much you'll save: Savings goal calculator →
Frequently asked questions about saving for children
Can a child have their own bank account?
Yes. Banks in Poland offer accounts for children, but until age 13 the account is managed by a parent or legal guardian. From age 13, the child can use the account independently, within the limits set by the bank's rules and parental consent.
Is a child's savings taxed under the Belka tax?
Yes. The 19% capital gains tax is deducted automatically by the bank or brokerage regardless of the account holder's age. It applies to interest from term deposits and savings accounts, as well as profits from selling securities.
Which treasury bonds are best for a child?
For a long horizon (over 6 years), ROS bonds (6-year family bonds) or COI bonds (4-year, inflation-indexed) are popular for their inflation protection. For a shorter horizon, consider 3-month OTS or one-year ROR bonds.
Can I save for a child through an IKE or IKZE?
IKE and IKZE accounts are tied to a specific individual and apply only to their own retirement. You cannot open an IKE for a child. However, you can open a brokerage account for a child (with parents as legal representatives) and invest through it.
Is an ETF safe for a child's savings?
ETFs carry market risk — unit value can fall. However, over a 15–20 year horizon, broad equity indices have historically delivered positive real returns. The key is diversifying and not panicking during downturns.
How much is enough to save monthly for a child?
Even 100 PLN a month saved from birth for 18 years at an average 5% annual return gives about 34,000 PLN. Regularity and a long horizon matter more than the exact amount.
What happens to a child's savings when they turn 18?
An adult child controls the funds on their own account independently. If the funds are held in a parent's account, the parent decides how to transfer them. It's worth agreeing on the rules and purpose of the savings with the child beforehand.
Is it worth buying gold for a child?
Gold can be a diversification element in a long-term portfolio, but it generates no interest or dividends. Storing physical gold involves costs and theft risk. Gold exposure can be obtained more cheaply through a gold ETF.
Can you open a brokerage account for a minor?
Yes. Some brokerages allow opening an account for a minor with a parent as legal representative. Terms vary between firms — worth checking offers from DM PKO, BOS, or DM mBank.
How do I choose between a term deposit and treasury bonds?
A term deposit guarantees a fixed rate independent of inflation — good when inflation is low. Inflation-indexed bonds better protect the real value of your money in a higher-inflation environment. Compare the current rates of both products before deciding.