November 13, 2025, 11:52 am | Read time: 3 minutes
Spend or invest child benefits? A new model calculation by Verivox shows how parents can enable their children to amass a fortune of millions with a consistent ETF savings plan and enough patience–using only the government child benefits.
More and more parents are investing the monthly child benefits in ETFs–and this can pay off in the long run. Those who invest the government support in broadly diversified index funds over 18 years, instead of spending it, benefit from compound interest and can build a substantial starting capital for their offspring. Assuming an average annual return of 7.5 percent–based on the historical performance of a global stock index–the wealth could even reach one million euros by age 46.
With Discipline and Time to the First Million
Especially in times of low interest rates and growing inflation concerns, investing in ETFs is considered an attractive way to build wealth without relying on individual stocks. The trend is positively viewed by politicians and consumer advocates, who emphasize that early and regular investments in funds can make a significant contribution to financial education and retirement planning.
The calculation by Verivox in this context is based on the current child benefit amount of 255 euros per month. Additionally, Verivox assumes an annual increase in child benefits of 2.5 percent. After the 18-year deposit phase of child benefits into ETFs, the child would only need to leave the accumulated capital untouched. The rest is handled by compound interest and capital gains.
“Compound interest unfolds its maximum effect over particularly long investment periods,” explains Oliver Maier, managing director of Verivox Finanzvergleich GmbH. “If parents start saving early and invest in broadly diversified ETFs, they create a solid financial foundation for their children, from which a considerable fortune can grow over the decades.”
At the end of the 18-year savings phase, approximately 68,500 euros of deposited capital has already grown to about 135,000 euros through capital gains. If the money continues to be invested, the wealth theoretically rises to 4.6 million euros by retirement age. After deducting capital gains tax and solidarity surcharge, about 3.8 million euros remain according to the model calculation.
Read also: Which app is best for buying ETFs?
Even Smaller Amounts Can Make a Big Impact
Not all families can invest the entire child benefit monthly in ETFs or other savings forms. But impressive results are possible even with smaller amounts. For example, those who invest 100 euros a month–also dynamically increasing and with a consistent return–can build a fortune of over 1.8 million euros by retirement.
Key to the success of such models are a long investment horizon and a broad diversification of investments to cushion price fluctuations. Verivox emphasizes that these are not guaranteed results–as with all stock market investments, there are also risks of loss.
All hints and information mentioned in the text do not constitute investment advice or a recommendation to buy or sell securities (§ 85 WpHG).