Investing for your children to help grow their future

Setting your kids up for their future can include kickstarting their financial journey through investing. Find out more about KiwiSaver for kids and what setting this up early means.

2 minute read

The beauty of investing is that you tend to see better returns in the long run. That means investing for your kids before they’ve even learned to count to 10 could set them up for a bright future. 

But how should you go about investing on behalf of your children?  There are a lot of different options out there, but one of the best is KiwiSaver.

The benefits of KiwiSaver 

KiwiSaver accounts don’t have minimum investment amounts, so you can get started with just a few dollars. KiwiSaver funds often have very competitive fees, and some providers waive fees (such as the member fee) for members aged under 18. The BNZ KiwiSaver Scheme doesn’t have a fixed member fee at all. 

The importance of fees for under 18s 

Fixed fees will chip away at smaller balances pretty quickly in the absence of good performance. For example, if you chose a KiwiSaver provider with a $25 per year fixed fee – and put $100 into it in the first year – you’d need an investment return of around 25% just to cover the fixed cost.

Signing your child up for KiwiSaver

While KiwiSaver can be an affordable investment option, you do need to keep in mind that the account balance will be locked away until your child qualifies to withdraw it – generally either when they purchase their first home or at retirement. It also pays to remember that Government contributions of up to $521.43 a year are only available to those who are eligible and aged 18 or over.

That said, KiwiSaver can be a great way to help your child into their first home – while teaching them important habits that will last a lifetime.

Take the opportunity to get your kids involved

If your children are old enough, look for fun ways to get them involved in their investments. It’s a great opportunity to show them the value of money and help with their financial literacy – teaching concepts like returns, shares, and bonds. It’s also a handy way to brush up on your own financial knowledge at the same time.

Deciding to invest for your children is a great step, but an even greater step is starting as soon as possible. As they say, the best time to plant a tree is 20 years ago – and the second-best time is today. So, consider investing on behalf of your kids. One day, they’ll thank you for it.

Related articles

Related products

Related tools

BNZ KiwiSaver Scheme

Find out more

BNZ Investment Services Limited, a wholly owned subsidiary of Harbour Asset Management Limited, is the Issuer and Manager of the BNZ KiwiSaver Scheme. Download a copy of the BNZ KiwiSaver Scheme Product Disclosure Statement PDF 1.1MB, or pick up a copy from a BNZ branch.

Investments in the BNZ KiwiSaver Scheme are not bank deposits or other liabilities of Bank of New Zealand (BNZ) or any other member of the National Australia Bank Limited group. They are subject to investment risk, including possible delays in repayment. You could get back less than the total contributed. No person (including the New Zealand Government) guarantees (either fully or in part) the performance or returns of the BNZ KiwiSaver Scheme or the repayment of amounts contributed. National Australia Bank Limited, the ultimate owner of BNZ, is not a registered bank in New Zealand but a licensed bank in Australia and is not authorised to offer the products and services mentioned on this webpage to customers in New Zealand.

BNZ Investment Services Limited (BNZISL) uses the BNZ brand under licence from Bank of New Zealand, whose ultimate parent company is National Australia Bank Limited. No member of the FirstCape group (including BNZISL) is a member of the NAB group of companies (NAB Group). No member of the NAB Group (including Bank of New Zealand) guarantees, or supports, the performance of any member of FirstCape group’s obligations to any party.

Account opening criteria, terms, and fees apply. BNZ Standard Terms and Conditions apply to all Rapid Save accounts. Rates and fees subject to change. A $3 withdrawal fee applies per withdrawal for all subsequent withdrawals per bank month.  A withdrawal includes transferring your money from your Rapid Save account to one of your other BNZ accounts. A ‘bank month’ refers to the period from the last business day of the previous calendar month to the second to last business day of the current calendar month. 

This article is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Neither BNZ nor any person involved in the material accepts any liability for any direct or indirect loss or damage arising out of the use of, or reliance on, all or any part of the content.