The Frühstart-Rente (early-start pension for children) or a savings plan of your own for the child: the two do not exclude each other, and the question can only be answered through the rules that apply to each route. This guide compares the state-supported route under the Frühstartrentengesetz with a freely chosen savings plan, without promising returns. Costs alone are covered in Frühstart-Rente Standarddepot (in German), here the focus is the comparison.
Quick answer: The Frühstart-Rente brings 10 euros a month from the federal government but is tied up until at least age 65, whereas a savings plan for the child stays flexible and receives no state payment. The Bundestag passed the Frühstartrentengesetz on 16 October 2026, and it has not yet been promulgated (Bundestag paper 21/7864). For both: returns are not guaranteed. Last updated: November 2026.
Key points
- The federal government pays 10 euros a month between the sixth and 18th year of life, at most 1,440 euros in total over the full period.
- Parents can pay in up to 6,840 euros per calendar year in addition. Parents’ expenses do not reduce tax.
- The capital is tied to retirement use, in principle not available before 65 and not attachable. A savings plan, by contrast, stays flexible.
- No acquisition or distribution costs may be charged until the 18th birthday.
- The Bundesrat wants only one privileged contract per child. A second contract would not receive tax privileges.
What does the Frühstart-Rente offer that a savings plan does not?
The main difference is the state contribution. Under section 2 of the bill, the Frühstartrente is 10 euros a month and is paid until the end of the month before the 18th birthday (Bundesrat paper 445/26). It applies to children from the completed sixth year of life, first for the 2020 cohort. Added to that is cost protection: until the 18th birthday acquisition and distribution costs are prohibited when concluding a contract and for capital transfers (section 3(2) no. 1). The Frühstartrente and the start capital are not income taxable under income tax law (section 29(1), Bundestag paper 21/7864), and the German pension insurance (Deutsche Rentenversicherung) describes returns in the savings phase as tax-free (Frühstart-Rente page, as of 20 October 2026).
Restrictions stand against this. The Frühstartrente may be used only as a retirement benefit, is not attachable and not transferable, and payout is in principle not provided before age 65 according to the explanatory memorandum (section 2(4)). The only investment product possible is a standard depot contract under section 1(1c) AltZertG (section 3(1)).
What speaks for a savings plan for the child?
A savings plan or a children’s depot is not tied to retirement provision. Depending on the contract you can access the capital earlier, for example for training, a driving licence or university. The choice of investment is not limited to the standard depot. That has a price: there are no state 10 euros, and costs and taxes follow the normal rules of the provider and of tax law. Capital gains are taxable to the extent they exceed the saver’s allowance of 1,000 euros per person (section 20(9) EStG). How a savings plan is put together depends on provider and product, the terms are in the contract documents.
| Feature | Frühstart-Rente (bill) | Savings plan or children’s depot |
|---|---|---|
| State contribution | 10 euros a month until the 18th birthday | None |
| Availability | Tied to retirement use, not before 65, not attachable | Depending on the contract at any time or with notice periods |
| Acquisition and distribution costs | Prohibited until 18 | Per provider terms |
| Investment product | Standard depot under section 1(1c) AltZertG | Freely selectable from the provider’s range |
| Tax on returns | Frühstartrente not taxable, returns in the savings phase tax-free according to the pension insurance | Taxable above the saver’s allowance of 1,000 euros |
| Parents’ top-ups | Up to 6,840 euros per calendar year in total, not tax-reducing | Per contract and provider |
| Guarantee | No return or loss guarantee in the collective investment (section 27) | No guarantee, depends on the product |
How large is the state share?
A worked example shows the order of magnitude without assuming any return. Assumption: the child meets the conditions for twelve years, and the parents pay in an additional 50 euros a month.
- The federal government pays 10 euros times 144 months, which is 1,440 euros.
- The parents pay 50 euros times 144 months, which is 7,200 euros. The annual total of 600 euros is below the top-up limit of 6,840 euros.
- In total 8,640 euros are paid in, of which about 16.7 percent comes from the federal government.
- Returns, costs and taxes are not included, and they decide the final capital.
In a savings plan without a state contribution the federal share is absent. In return the money is not tied to retirement provision. Which route brings more wealth cannot be said in general, because performance is open for both.
Can I combine both?
Legally the combination is obvious: the Frühstart-Rente as a tied building block, a savings plan as a flexible one. Under the Bundesrat opinion of 25 September 2026, only one standard depot contract per child up to age 18 is to receive tax privileges, and contributions to a further contract would not count as retirement provision contributions (Bundesrat paper 445/26 (decision)). According to the report on the Bundestag vote, the federal government agreed with this direction (Bundestag text archive). An additional savings plan that is not a retirement provision contract is unaffected. Topping up within the Frühstart contract is covered in Frühstart-Rente aufstocken (in German).
What risks do both routes carry?
- Market risk lies with the child or the parents on both routes. The federal collective investment guarantees neither a return nor compensation for losses (section 27).
- With the Frühstart contract, the legal text can still change before promulgation.
- With a savings plan, costs and running charges can noticeably reduce returns; the prohibition of acquisition and distribution costs in the Frühstart-Rente applies only until the 18th birthday.
- Whether state payments affect family benefits is not regulated in the bill. It contains no rule on child benefit.
Frequently asked questions
Is the Frühstart-Rente better than an ETF savings plan for a child?
That cannot be answered in general. The Frühstart-Rente offers the federal contribution and cost protection until 18, but is tied up. An ETF savings plan is flexible, without a contribution. Both carry market risk, and returns are open for both.
Can I set up a savings plan without the Frühstart-Rente?
Yes. A savings plan for a child is possible independently of the Frühstartrentengesetz. If you want to use the state 10 euros, however, you need a qualifying contract.
What if my child is not in the first cohorts?
Then the contribution does not apply at first. A contract is possible for older children under 18, but without state payment (section 3(4)). The comparison with a savings plan is then especially relevant.
Do I have to apply for the Frühstart-Rente?
Under the bill the provider is deemed authorised to file the application. Details in Frühstart-Rente anmelden (in German).
What to do now
- Clarify whether your child belongs to a cohort that receives the state 10 euros.
- Decide how much money you want to tie up for retirement provision and how much to keep flexible.
- Compare standard depot providers and savings plan providers on running costs once the law is promulgated.
- Decide on the split. You can get a personal assessment from Academycon.
Related guides
- Altersvorsorge 2027: Der Überblick zu Depot, Frühstart-Rente und Riester (in German)
- Frühstart-Rente: Was sie bringt und wer sie bekommt (in German)
- Frühstart-Rente Standarddepot: Lohnt sich ein Depot für Kinder? (in German)
- Frühstart-Rente aufstocken: Lohnt sich eine Zuzahlung der Eltern? (in German)
Sources: Bundesrat, paper 445/26, bill for an act introducing a Frühstartrente, 14 August 2026; Bundestag, paper 21/7864, Frühstartrentengesetz, 7 September 2026; Bundesrat, paper 445/26 (decision), 25 September 2026; Deutsche Rentenversicherung, information page Frühstart-Rente, as of 20 October 2026; section 20 EStG, saver’s allowance.
Last updated: November 2026. This guide is general information, not individual advice.
