There’s no NZ equivalent to the UK Junior ISA or the Australian dedicated children’s investment account structure. But there are several good options — each with different tax, flexibility, and growth implications. Here’s how to choose.
For most NZ parents: open a managed fund or index fund in your own name earmarked for your child (Kernel, InvestNow, or Sharesies — no minimum age restriction). This is more flexible and grows faster than a bank savings account. KiwiSaver for children is available but has no employer contributions until employment — it's mainly useful for teaching saving habits. There's no special tax advantage to saving in a child's name in NZ — income is attributed to the parent if funds are provided by the parent.
Option 1: Bank Savings Account in Child’s Name
The simplest and most widely used option. Most NZ banks offer children’s savings accounts:
| Bank | Account name | Interest rate (indicative) | Features |
|---|---|---|---|
| ANZ | Grow | ~3.0–4.0% | No fees; online access |
| ASB | Headstart | ~3.5% | Includes piggybank feature |
| BNZ | Rapid Save (minor) | ~3.0–4.0% | — |
| Westpac | Kidstart | ~3.5% | Good online tools for kids |
| Kiwibank | Kids Account | ~3.5% | Visual saving goals |
Pros: Simple. Child can see their balance. Teaching tool for saving habits.
Cons: Low real returns after inflation. No compounding growth beyond interest. NZ bank savings accounts have real returns of approximately 0–1% after inflation and tax.
Tax note: Income earned in a minor’s savings account is attributed to the parent for tax purposes if the funds originated from the parent. IRD’s attributing rule means the parent reports interest income, not the child. If the child earned the money themselves (gifts, odd jobs), the income is the child’s.
Option 2: KiwiSaver for Children
Children can join KiwiSaver at any age — there’s no minimum age.
How it works:
- Parent sets up a KiwiSaver account for the child with a provider (e.g., Fisher Funds, Simplicity, Milford, Booster)
- Contributions can be made by parents (or as gifts)
- No employer contributions until the child is employed
- No government member tax credit until age 18
- Child retains control at 18
- Can be used for first home purchase (if eligible) or retirement
Providers good for children’s KiwiSaver:
- Simplicity — low fees (~0.31%), growth fund
- Kernel — low fees (~0.25%), global index approach
- Fisher Funds — wider range, more admin support
Pros: Genuine long-term investment growth. Low-fee growth fund started at birth = 65 years of compounding. Builds a KiwiSaver history for the child.
Cons: Locked in until retirement (age 65) or first home use. No flexibility if the child needs the money for education, travel, or other goals before 65.
Verdict: Good for a portion of long-term savings where flexibility isn’t needed.
Option 3: Managed Fund or Index Fund (In Parent’s Name)
The most flexible and potentially highest-growth option. Open an account in your own name and simply earmark it for your child.
NZ platforms:
| Platform | Minimum investment | Annual fee | Best for |
|---|---|---|---|
| Kernel | $1 | ~0.25% p.a. | Long-term index investing |
| InvestNow | $250 initial | 0% platform fee (fund fees apply) | Fund variety |
| Sharesies | $1 | ~0.5% transaction | User-friendly, smaller amounts |
| Smartshares | $50/month | ~0.5% | NZ/ASX/global ETFs |
Example: Invest $100/month at 8% average return from birth to 18 = approximately $52,000 at age 18.
Pros:
- Full flexibility — money can be used for anything (university, first car, travel, house deposit)
- Investment in growth assets with meaningful real returns
- No lock-in period
- Low fees on index funds
Cons:
- Account is legally yours (not the child’s) — requires trust and clarity of intent
- Subject to your marginal tax rate or PIE rate (typically 28% for FIF income)
- If you hit financial difficulty, these funds are legally available to creditors
Option 4: Index Fund / Managed Fund in Child’s Name
A managed fund account held by a minor, with a parent as trustee.
Some platforms allow this:
- Sharesies allows accounts for under-18s (requires a parent/guardian account)
- InvestNow — check current terms for minors
- Kernel — primarily adult accounts; check for minor provisions
Tax: Once the child turns 16, income may be taxed at their own (lower) rate. Under 16, still attributed to parent.
Option 5: Term Deposits in Child’s Name
For shorter-term savings goals (2–5 years), term deposits offer predictable returns and are simple to manage.
- Typical rate (1-year TD, mid-2026): ~5.0–5.5%
- After tax (child’s rate if they have own income or 10.5% if very low income): ~4.5–4.9%
- After inflation: Real return ~2–2.5%
Better than an on-call savings account, but lower long-term growth than equity index funds.
Option Comparison Table
| Option | Growth potential | Flexibility | Complexity | Best for |
|---|---|---|---|---|
| Bank savings account | Low | High | Very low | Teaching habits, short term |
| KiwiSaver (for child) | High (growth fund) | Very low (locked in) | Low | Long-term retirement head start |
| Index fund (parent’s name) | High | High | Low | Primary long-term savings vehicle |
| Index fund (child’s name) | High | Medium | Medium | Giving child ownership |
| Term deposit | Medium | Low (fixed term) | Low | Specific near-term goals |
What a $100/Month Investment at Birth Grows To
Assuming 8% average annual return:
| At age | Approximate balance |
|---|---|
| 5 years | $7,400 |
| 10 years | $18,400 |
| 18 years (school leaving) | $52,000 |
| 25 years (independent adult) | $103,000 |
Starting earlier is the most powerful variable.