Erin Miller started saving for her daughter Harper's house deposit before Harper could walk. Five years on, the nest egg has grown to $10,000, and the family is doing the same for son Beau, aged four.
Miller, from Sydney's southwest, initially used a high-interest bank account but switched to an investment account on her financial adviser's recommendation. She invests $25 per week, a sum she says "worked out well for our family and it's something that just ticks away in the background."
Rise in Children's Investment Accounts
Investment platform Raiz reports a 45 per cent jump in children's accounts nationally over the last 18 months, with outer suburban areas seeing the sharpest increase. CEO Craig Keary noted that many accounts are now opened before a child turns five, including during their first year.
"This indicates that parents are thinking much earlier about their children's financial future," Keary told 7NEWS.com.au. A Flinders University study found housing affordability concerns weigh on 40 per cent of Australians.
Expert Advice and Tax Considerations
Financial adviser Alex Jamieson said micro-investing platforms have removed cost barriers, making $25 weekly contributions effective. However, he warned that under a bare trust, children gain absolute entitlement at 18 and can spend the money on anything, not necessarily a house deposit.
Mark Chapman from H&R Block cautioned that tax treatment depends on who owns the money. If parents retain control, interest is declared on their return, and children face special rules on unearned income.
"Helping children save for their first home is a fantastic goal, but it's worth spending a little time getting the structure right at the beginning," Chapman said.
Family Journey
Miller plans to involve her children as they grow older. "They do know that we have money put away for them, and every now and then they'll say, 'Can we check our money?'" she said.
