We don't just save or invest for ourselves. Often we want to put aside a sum of money for our children, grandchildren or godchildren too. That nest egg will come in very handy if they ever want to buy a house or get married.
The solution best suited to you depends on when you want that money to become available.
Less than five years: save
Saving is the ideal solution if you want a tangible result in less than five years. A regulated savings account offers the following benefits:
- Tax efficient
Individuals are exempt from withholding tax (currently 15%) on the first 980 euros of interest earned each year (2023 income).
You decide when and how much you save.
- Ease and convenience
Saving by standing order allows you to put aside a fixed sum of money at a frequency of your choosing, and means you don't have to keep reminding yourself to save.
- Insolvency risk
A maximum of 100,000 euros of your aggregate deposits with KBC Bank are guaranteed per person, subject to certain conditions. In the event of the KBC Bank’s insolvency (e.g., if it goes into bankruptcy), you run the risk of losing any deposits you have over 100,000 euros, or their amount could be reduced or converted into shares. You can obtain a free copy of our ‘Protection of deposits and financial instruments in Belgium’ brochure from your KBC Brussels branch or from your www.kbcbrussels.be/depositprotection.
- Inflation risk
Keep in mind that sustained price increases can result in a loss of value of the deposited amount.
More than five years: invest
Investing is the ideal solution if you want a tangible result in more than five years. Longer-term investments offer the following benefits:
The current low interest rates means that investments can offer higher potential returns than savings.
- Capitalisation effect
The longer the investment horizon, the greater the possible return. Because the child won't need the money for a long time (until their 18th birthday, for instance), the return on the investment can be reinvested and in turn generate additional income. We call that the capitalisation effect.
- Ease and convenience
You invest a fixed sum of money (starting from as little as 25 euros) at a frequency of your choosing.