Sweden's decision to raise the tax-free threshold on investment savings accounts (ISK) and capital insurance (KF) to 300,000 kronor per person at the start of 2026 has renewed a debate among savings economists about whether parents should hold investments in their children's names, Expressen reports.
The change, which took effect at the turn of the year, applies per individual regardless of how many accounts a person holds. According to Expressen, it has opened up saving in a child's name as a way to maximise the amount of capital that escapes standard ISK and KF taxation.
The two major Swedish online banks, Avanza and Nordnet, report differing views on whether the reform has actually changed behaviour. Expressen reports that Avanza has seen a sharp rise in accounts opened in children's names around each new year, though from low levels. At the start of 2025, the number of new ISK accounts opened for children tripled, and at the turn of 2025–26, more than twice as many children received a new ISK at the bank.
Nordnet, by contrast, has not recorded a comparable surge. Calle Söderberg of Nordnet told Expressen that the share of new customers who are minors varies considerably from year to year, but no major increase has been observed since 2025.
"We don't see a clear shift in trend there," Söderberg said, according to Expressen. He suggested the reason may be that private savers are simply unaware of the option, or that they place greater value on retaining legal control over the money before it passes to the child.
Why it matters
The tax-free ceiling on ISK and KF was first introduced at 150,000 kronor per person in 2025 and doubled to 300,000 kronor for 2026. Because the allowance applies to each individual, a household with children can in theory multiply the amount of capital held outside standard investment taxation by opening accounts in each child's name.
But Expressen reports that savings economists warn the arrangement carries a significant legal catch: money placed in a minor's account is treated as a gift, and parents cannot simply take it back.
Felicia Schön of Avanza told Expressen she would strongly advise against the approach for that reason.
"I have had discussions with parents where the money unfortunately disappeared," she said, according to Expressen.
The legal trap in saving for a child
Under Swedish law, assets in a child's account belong to the child. Expressen reports that a bank may question a parent who wants to make a withdrawal, and the parent must be able to show that the money will be used for something that benefits the child.
Because the accumulated sum can grow large over time, the question of whether an 18-year-old is ready to receive the money on their birthday also comes into play, Expressen notes.
The tax mechanics differ between the two account types as well. Expressen reports that while ISK and KF are both taxed according to the same standardised rate, the tax is paid differently. If a child holds a KF in their own name, it is in most cases impossible to make use of the tax advantage, because it must be claimed as a deduction against tax already paid on income, for example.
Schön told Expressen that at current tax levels, the saving from the arrangement amounts to a maximum of around 3,000 kronor a year, which she said must be weighed against the drawbacks.
Söderberg at Nordnet takes a less negative view. According to Expressen, he argues the sums can be larger over time. If a saver puts aside 1,000 kronor a month for 18 years, assuming a 1 percent tax and an average annual return of 7 percent, the difference comes to roughly 35,000 kronor in total, he said.
"There is no clear right or wrong here, I think, it has to be up to each parent and each family," Söderberg told Expressen. "But there is an advantage in tax terms."
Where the two economists agree
Despite their disagreement on saving in a child's name, both economists told Expressen that saving for children is a good starting point for those who can afford it.
With a long time horizon, the stock market is a suitable place for children's savings, whether through direct share purchases or broad index funds, according to Expressen. The article notes that a savings account with low or no interest is expected to lose value in real terms when measured against inflation.
"Given the long time horizon, I think the stock market is a good alternative. I don't think you should be worried about that," Söderberg said, according to Expressen.
Expressen reports that even small monthly amounts of a few hundred kronor can make a difference over time and form the basis for continued saving once the child becomes an adult. How much a family sets aside should depend on its own finances.
"You shouldn't be run off your feet yourself or deprioritise your own pension saving to get a children's savings plan going," Schön told Expressen.
Söderberg added that starting early is a clear positive, giving the money a chance to sit in the stock market, which he said has historically grown savers' money by roughly 8–10 percent a year.
ISK and KF are financial products that allow saving in shares and funds without paying tax on each individual gain or dividend. Instead, holders pay an annual standardised tax based on the account's value and deposits. Amounts above the 300,000 kronor threshold are taxed under those standard rules.
The next test of whether the reform changes behaviour will come at the turn of 2026–27, when Avanza's year-end figures will show whether the pattern of new accounts in children's names repeats.
