Notes that pile up, or transfers that add up… The end of year celebrations can, in some families, turn into a headache: where to deposit the money received for your children? Responses, in the plural, depending on the purpose of these gifts, with the help of the Finance for All institute.
Note, check or transfer… Gifts of money are no exception. A recent PixPay survey even breaks the magic of the Christmas “surprise gift”: this only pleases 9% of teenagers… while 64% admit they prefer to receive money. Quite simply.
But how much do minor children receive in money from grandparents or other relatives? Even INSEE does not provide a precise answer to this question…
For the parents of children who receive money, this gift can be a poisoned chalice. It all depends on the amount and the age of the minorexecutive from the outset Pascale Micoleau-Marcel, general delegate of Finance for All (1) : “If it is really a question of New Year gifts, for example 500 euros from the grandparents, it is better to favor an educational support, such as the Livret A. If a minor receives 5,000 euros, there , it is probably necessary to declare this donation to the tax authorities, and we are no longer simple gifts! »
How much can you give to your children or grandchildren without paying taxes?
1 – If it’s only “pocket money”
First case: real “gifts”, of a few tens or even hundreds of euros, which should still be deposited in the bank to avoid bills piling up… In this case, plan on an investment long term is not necessarily the objective of donors. “Even if the minor child is not going to spend this amount right away, it can be managed like precautionary savings for an adult,” judges Pascale Micoleau-Marcel: “ Explain to the child that the amount exists, in a booklet, and that he can withdraw it in agreement with his parents for a given project. »
What precautionary savings support for a child? Better paid than the Livret A – or, at worst, at the level of the Livret A, at 3% – and capped at 1,600 euros, the Livret Jeune is the most suitable precautionary savings vehicle if the child is over 12 years. Otherwise, in the booklet section where savings are available immediately, at any time, banks offer Livret A or “children’s” booklets, on which the interest is taxed but whose rates can sometimes be attractive.
“Children’s” booklets
2 – If it’s about learning to save
Offering money is not always the default choice. Some grandparents or other relatives attach an educational vocation to it, that of learning to put aside, in order to follow developments… and to use it later. In this scenario, too, Pascale Micoleau-Marcel praises the merits of Livret A: “Certainly, Livret A does not offer attractive long-term remuneration. However, if the objective is to make the child responsible, to have educational support for saving little by little, a booklet can be a good solution. » Objective of the parents, in this case: to follow the evolution of this savings with the child in order to explain the mechanism of annual interest, in particular.
1,000 euros on a Livret A, how much interest does that add up after 1, 5 or 10 years?
Learn about the stock market for an adult child?
The general delegate of La Finance pour tous also underlines that the relatives behind the gift have the right to suggest support if this corresponds to a desire for financial initiation. “If the child is an adult, this is perhaps an opportunity to discover the PEA Jeune, and to support them in discovering the actions,” suggests Pascale Micoleau-Marcel, in reference to this new variation of the Plan d Savings in shares, accessible to young adults still attached to the parents’ tax household.
Is the PEA Jeune already a fiasco?
3 – If it is long-term savings
A few years ago, the Housing Savings Plan and its 2.50% annual remuneration guaranteed for more than a decade seemed like a godsend. But… ” The home savings plan is no longer the miracle product it was! » as Pascale Micoleau-Marcel points out. And this even if the PEL rate rises again in 2024: a PEL opened in January will be remunerated at 2.25% gross with taxable interest from the first year, i.e. 1.58% net. “It remains a good way to put money aside, regularly, for a child,” judges the general delegate of Finance for All.
Who is interested in opening a PEL at 2%?
And the Retirement Savings Plan? It’s finish ! The government voted in its 2024 budget to close the subscription of PERs for minors, in order to make room for the Future Climate Savings Plan (PEAC), which will be directed towards “financial securities which contribute to financing the ecological transition » and, above all, which will allow the child to have access to his money when he comes of age. But, in fact, this brand new PEAC will only be available in banks from summer 2024…
And life insurance which, subscribed in the child’s name, does not restrict withdrawals? “It all depends on the size of the sums but, on practical aspects, life insurance is not necessarily the most suitable support for New Years because parents will have to manage this support, keep an eye on the evolution of the ‘saving. This could be a poisoned chalice. Why not, but only if it involves bringing together these family donations on the same life insurance contract, year after year. »
What is life insurance reserved for children worth?
Can you take risks with your children’s savings?
Faced with current instabilities, it is difficult for parents seeking to grow their children’s savings to find support that is both risk-free and profitable. In these conditions, can you take a dose of risk with your children’s savings? “ The legal administrator is required to exercise prudent, diligent and wise care in the management of the minor’s property, in the sole interest of the minor. », answers the civil code. It is forbidden to “flambe”, therefore, but nothing prevents you from taking measured risks. “Freedom, yes, but freedom not to squander! » summed up notary Me Jean-Michel Mathieu on this subject to MoneyVox a few years ago.
If you ever take the gamble on life insurance, as long-term support for all of a child’s savings, Pascale Micoleau-Marcel reminds us that “pay 100% into the fund in euros”, the support without risk of life insurance, is “almost no longer possible”: “Especially if it is for a child: the insurer will consider that it is a matter of long-term savings and therefore that a dose risk is recommended. » Everything then depends on the financial knowledge of the parents, whether you wish to manage your children’s unit-linked support (without capital guarantee) yourself, or whether you prefer the managed management option.
Can you speculate with your children’s savings?
(1) Finance for all is the brand of the Institute for Public Financial Education (IEFP), an independent association approved by the Ministry of National Education for its vocation of financial education, but which is notably supported by “the Bank of France, the Financial Markets Authority, the French Banking Federation, as well as large financial establishments”.