The Ministry of Finance explained the details of the special investment account that parents will be able to open for infants during the first two years from their birth.
The state will deposit into the account an amount equal to what the parent deposits each year and up to 1,200 euros annually, until the child reaches the age of 18. The amount of 1,200 euros will increase by 10% every five years (1,320 euros in 2032, 1,452 euros in 2037, etc.).
Withdrawal can only be made when the child reaches 18 years of age. Exceptionally, a withdrawal may be made in the event of the death of a parent or the death of the child or in the event of serious health reasons of the child requiring surgical treatment as certified by a public hospital. After reaching the age of 18, the amount that has accumulated is transferred to a standard deposit account in the name of the child.
The income that the child receives from this investment account will be exempt from income tax (whether it concerns 15% interest tax or capital gains transfer tax or dividend tax).
With an annual deposit of 1,200 euros from the parent and 1,200 euros from the state (total 24,000) which will increase by 10% every five years, in 18 years capital of 49,304 euros will have been deposited, which with interest is expected to exceed 60,000 euros and depending on the performance of the investment product may also exceed 70,000 euros or even more over 18 years, depending on the investment product the family chooses.
The maximum amount that the parent may contribute annually amounts to up to 10,000 euros, so that the account does not become a vehicle for concealing wealth. The payment rate may be monthly by standing order (e.g. 100 euros per month) or whenever the parent wishes.
In the event that in some year the parent does not pay an amount, the account continues normally to be active and to accrue interest, it is simply that the state also does not contribute for that year. The amounts of the state contribution will be credited periodically to the accounts by the Ministry of Finance.
Each child may have one investment account. In order for the account to be opened, at least one of the two parents must be a tax resident of Greece and no income or asset criteria apply.
The amounts of the investment account will be mandatorily invested in mutual funds, shares, corporate bonds traded on the organized market or government bonds. Investments may take place only through organized markets of Greece and the EU (third countries are excluded).
The investment products may vary in terms of risk of the return that the parent may choose. There will be a common disclosure template, a single total expense ratio (Total Expense Ratio) and a uniform calculation methodology for all types of providers, so that each family can compare products on a common basis. The parent has the possibility of free transfer to other approved investment products among providers.
The investment account will be offered by banking institutions, insurance companies or Investment Services Firms (ISFs) operating in Greece and in order to be included in the program they will receive special approval (in cooperation with the Hellenic Capital Market Commission and the Bank of Greece where required) that the necessary terms of the product are met.
The goal is for the first investment products to be available from the beginning of 2027, so as to cover infants up to 2 years old (that is, who were born in 2025 or 2026).
The fiscal cost under the assumption that 1/3 of infants born annually are included (approximately 23,000 infants annually and 56,000 during the first year of implementation) is estimated at 55 million for the first year of implementation, increasing by approximately 27 million annually. The cost is expected to reach about half a billion euros by 2040.
According to the Ministry of Finance, the measure serves multiple benefits, both social and for the Greek economy:
(a) children are tangibly supported and financially secured for the first steps of their adult life, whether it concerns studies, the start of professional activity, or starting a family,
(b) a culture of saving and investment is created among children and parents with obvious benefits for the finances of each family,
(c) as the money is invested, conditions are created for raising additional capital by Greek businesses both through shares traded on the capital market and through bond issuance,
(d) this regulation is in line with the new European direction for the Savings and Investments Union (Savings and Investments Union-SIU), which has precisely the goal of strengthening savings in investment products that contribute to economic growth.
Example: A parent of an infant born in 2026 opens an investment account within 2027 and deposits an amount of 1,200 euros per year in the years 2027 to 2031, 1,320 euros in the years 2032 to 2036, 1,452 in the years 2037 to 2041 and 1,597 euros from 2042 to 2044. Corresponding amounts will have been paid by the state.
In total, 49,304 euros will have been deposited in the investment account by the age of 18, of which 24,652 by the state. If the investment account has a return of 3%, the amount that will have accumulated by 2044 and will be available to the child upon reaching adulthood amounts to 64,109 euros. If the parent chooses an investment product that carries a return of 5%, the amount that will have accumulated will amount to 77,062 euros, while he himself will have paid only 24,652 euros.