Possible to withdraw from child bank account?

[jamesc]

Has anybody managed to transfer or withdraw money from a child's bank account?

A few years ago I opened an account with the cantonal bank (BCV) for my daughter and paid in a few hundred CHF every month, believing that I had done the best for her. I soon realised that it was earning a measly 1% interest and the 40CHF incentive that they had given me to open the account was really a cheap way of locking all the money up with them for 18 years. In hindsight I really should have just opened an investment account and invested in cheap ETFs.

It seems that you can only withdraw money from a bank account if it is in the interest of the child. I consider that it is precisely in he interest of the child for it to be invested in a way to achieve the best growth rate but it seems that BCV doesn't agree and that I may even have to apply to the court for it to be released and prove that I'm not going to buy a sportswear or something. There is about 4k CHF in the account at the moment. Not a huge amount but it's more the principle. I don't like the fact that it is inaccessible and growing below the rate of inflation.

My question is - has anybody managed to withdraw / transfer money from a child account to somewhere where the money might actually grow? Do you really need to apply to the local court, or is there a more straightforward option?

Thanks very much for all the information on this site. Excellent and very useful blog. I have learnt a lot and cancelled my 3A with life insurance package just last week.

James

 

[Baptiste Wicht]

Unfortunately, as you discovered, these accounts are pretty much locked in. The official reason is to protect your children, which makes sense. But I think that there is also a strong push for banks to keep that money locked so that they can invest it long-term and pay back a small interest rate.

There may be exceptions, but I think you are unlikely to be able to transfer it to another bank. However, it would be great to hear about other experiences!

Even though it's for principles, it's likely not worth going to court over this, and better to stop putting money there and invest it as you said, it's not too late.

 

[bqm]

This is for sure specific to the bank. But I‘m quite surprised if this should be the case. These accounts and the funds within are yours till the beneficiary turns 18. They are not even tax sheltered i.e. you pay taxes as you do with other investments accounts in your name.

In my case (ZKB) I could withdraw up to chf 10‘000/month and I‘m free to close the account.

 

[jamesc]

UPDATE - I am pleased to report success. I wrote to BCV (Chat GPT generated letter which was excellent!) saying that the money was needed for creche fees (which is partially true...) and they have, to their credit, transferred the money back to me. I will now invest in low cost ETFs that should mean the money grows by the time my daughter is 18 or so.

 

[Baptiste Wicht]

Thanks for sharing the update and congratulations on getting the money on a better-yielding investment for your children.