Put your child's money to work early

The third pillar's appeal is the tax benefit: you get income tax back on your contributions. But only a person who earns taxable income themselves gets the refund. A child usually doesn't, so paying into a child's third pillar creates no tax benefit.

Second, the third pillar is meant for retirement: with the favorable tax rate, the money only becomes available close to retirement age. For a child, this would mean locking the money away for decades. From the Additional Investment Fund, your child can use the money when they need it, for example for education or a first home.

Saving in the child's name in the Additional Investment Fund, the tax win comes from the other end: when selling units, the child can use their yearly tax-free income, which today is 8,400 € per year.

Once your child starts earning income themselves, they should consider their own third pillar too, because then they get a tax benefit as well. If your child already has a third pillar account opened before 2021, keep it as it is: these are separate accounts and don't mix. And your own third pillar is worth filling before you start saving for your child. Read more →

In stock markets across the whole world. For every euro we buy shares in close to 2,500 of the world's largest listed companies. The fund follows the MSCI ACWI index, which covers both developed and emerging markets. A sustainability filter leaves out a couple of hundred companies that comply least with ESG rules.

We don't pick individual stocks and we don't try to time the market. We invest on the same principle in Tuleva's second and third pillar equity funds.

The fund pays no dividends. It reinvests what it earns, so the money has longer to grow and there is no tax to pay in the meantime.

Read more: where the Additional Investment Fund invests →

Nobody knows in advance. We don't try to outsmart the market. Our aim is to earn the average return of the world's stock markets at the lowest possible cost.

Over the past hundred years, world stock markets have returned roughly 7% per year. That is a long-term average, not a promise. There have been very strong years, and there have been periods when markets fell for years on end. The fund can also make a loss in some years.

When you save for a child, time is on your side. The longer you invest, the more single bad years even out in the average. A child's horizon is usually decades long.

We don't show the fund's own return on this page yet. The fund's history is too short for that, and a few months' numbers would confuse more than they explain. You can find the unit price history on the fund's documents page →

Returns are not guaranteed. The value of an investment can both rise and fall.

The fund's ongoing charges are 0.28% per year. There are no entry, exit, performance, management, currency exchange or other fees on top of that. Opening an account is free.

You can start with as little as one euro. If you like, you can set up a recurring payment, for example the size of the monthly child benefit. You can change or stop it at any time.

LHV's Kasvukonto is a platform where you choose yourself which fund your child's money is invested in. There are many options, both good and worse ones, and you have to pick the right fund yourself. Tuleva's Additional Investment Fund has just one fund, a broad-based index fund with a fee of 0.28% per year, and we stand behind it.

Swedbank's child products (Koolifond and its successor, the Lapse Tuleviku fund) mix investing with insurance. The total cost of such products is estimated at around 1.5% per year, and the exact amount depends on the contract. Tuleva's fund is meant for investing only. If you need insurance, that is a separate purchase.

Read more: 3 reasons to avoid child-labeled savings products

You can make contributions to your child's savings fund account both from your own bank account and from the child's. We have confirmed with the Estonian Tax and Customs Board that in both cases your child gets an acquisition cost for the units, and in the future only the gain is taxed on sale, not the whole amount.

If a grandparent or another close person wants to make a contribution to your child's account, the simplest way for now is for them to gift the money to you: you transfer it to your child's account and from there to the fund. If a gift lands straight on the child's account, investing it requires the court's consent by law. That is why we recommend gifting through the parent. We are still working on a solution that would let family and friends make gifts straight to the child's savings fund account.

Both parents can manage the child's account if the population register gives them the right to manage the child's property. We check this from the population register.

If one parent has already opened the account, the other doesn't need to open a new one. They do need to identify themselves once. To do that they log in to the Tuleva website and pick the child's name from the menu. The second parent then goes through a short questionnaire too. After that the child's account is an ordinary account for them. They see the balance, and they can make contributions and sell units just like the first parent.

Both parents' right of representation lasts until the child's 18th birthday.

If the register doesn't give the other parent the right to manage the child's property, they can't manage the account. This happens, for example, when a court has given the right to one parent only. They can still make a contribution: they transfer the money to the first parent, who passes it on to the child's account.

Units can be sold at any time and the money is paid only to your child's own bank account. This keeps your child's assets protected: money cannot move to anyone else's account.

Units bought with the money you contributed yourself can be sold by you as your child's representative without extra conditions. If units were bought with the child's other money (for example a gift or an inheritance received straight to the child's account), the sale requires the court's consent by law. You can ask the court for a general consent covering the whole childhood. The state fee is 10 €.

The state is preparing a legislative change that would make investing in a child's name even simpler. We wrote about it on the blog →

It depends on whether you make contributions from a regular bank account or through an investment account.

Making contributions from a regular bank account, you don't need to open a separate investment account for your child or file a tax return for them every spring. A tax return has to be filed in the child's name only when units are sold at a gain. Only the gain is taxed, and your child can use their own tax-free income, which today is 8,400 € per year. Selling units spread over several years, there may be no income tax at all.

Making contributions from an investment account, a tax return has to be filed in the child's name every spring. You declare the difference between the money paid into the investment account and the money paid out of it. Contributions to the savings fund are marked neutral if you haven't sold any units in the same year. As the fund started in 2026, the first tax return is due in the spring of 2027 – by then we will have guides that make it as simple as possible for you.

Read on the blog which approach suits your family →

At 18, the decision does indeed pass to your child, because the assets are theirs. In practice, this fear is usually bigger than the actual risk: a young person who has watched their money grow for years treats it as their future assets, not as a windfall.

What helps most is involving your child in saving early on: show them how the account grows and talk about what you are saving for. That way the money won't come as a surprise at 18.

Experience elsewhere shows the same: data on the UK's similar product (the Junior ISA) shows that only 6.5% of young people withdrew the whole amount right at 18 (AJ Bell, 2026).

A child's third pillar doesn't give an income tax refund, because a child generally doesn't earn enough income. That's why it's worth directing new contributions to your child's Additional Investment Fund; what's already saved keeps growing in the third pillar.