The bill from the Ministry of National Economy and Finance on measures announced at the Thessaloniki International Fair provides for an Individual Investment Account for Minors, with the state matching private contributions up to an annual limit of €1,200. The bill is before Parliament and is being examined by the relevant committee.
The account is designed as a long-term savings and investment vehicle for children. The application will be submitted by the child’s legal representative to a provider of their choice before the child turns two. Under current plans, the accounts are expected to open in early 2027 and will initially be available to children born in 2025 or later.
Eligible beneficiaries will be children aged up to two who are Greek citizens or citizens of a European Union member state, provided they are tax residents of Greece. Each child may have one account.
Providers and transfers
Providers may include banks, mutual fund management companies, investment firms, insurance companies and other suitable financial institutions. The account may be transferred from one provider to another without losing its tax benefits or other rights.
Parents, grandparents, relatives, godparents and businesses will be able to pay money into the account. Total private contributions may not exceed €10,000 per child per calendar year.
The State will add an amount equal to eligible private contributions, up to €1,200 a year. The annual limit will rise by 10% every five years: from €1,200 initially to €1,320 after the first five years, €1,452 after the second and €1,597.20 after the third.
State contribution
The state contribution is expected to be paid monthly as a rule on contributions of up to €100 a month, with an annual reconciliation covering all payments by 31 December. So, if a family pays in €100 a month, it will contribute €1,200 over the year and the state will add another €1,200. The total will reach €2,400, before investment returns and charges.
If a family pays in €5,000, the state contribution will remain capped at €1,200. If it pays in €600, the state will add €600, since the matching contribution cannot exceed the private contribution.
The funds will be invested exclusively in eligible financial instruments, such as mutual funds and ETFs, as well as shares and bonds traded on regulated markets in the EU or the European Economic Area. Investments in crypto-assets, derivatives, leveraged products, structured products and certain alternative investments will not be permitted.
Investment profile
Deposits and money market funds will be treated as cash and, as a rule, may not exceed 5% of the portfolio. Diversification rules and exposure limits will also apply to prevent the capital from becoming too heavily dependent on a single share or market.
The parent or legal representative will choose an investment profile based on the balance between fixed-income investments and shares. Four options are available:
- Conservative: 100% fixed income, 0% shares.
- Balanced: 70% fixed income, 30% shares.
- Growth: 30% fixed income, 70% shares.
- Dynamic: 100% shares.
Under the text submitted to Parliament, the default for those who do not specify an investment strategy is a long-term product with a conservative profile and guaranteed capital. This differs from the description in the initial material, which referred to a growth profile by default and an automatic switch to a balanced profile three years before the child reaches adulthood.
Capital protection
The protection provided covers private contributions up to the amount matched by the state — initially, up to €1,200 a year — as well as the corresponding amount paid by the State. When the beneficiary reaches adulthood, the value of the investments built up from these amounts must not be lower than their nominal value.
Contributions above the annual state-matching limit are not automatically protected. Additional protection may be selected for these contributions at a separate charge. Cover will be backed by a commitment from an EU credit institution or insurance company and will remain in force even if the provider becomes insolvent.
The total annual cost of the default investment option may not exceed 0.50% of the account’s average annual value. Taxes, regulated-market fees and the cost of additional capital protection, which will be shown separately, will not count towards this limit.
Transparency and oversight
The Ministry of National Economy and Finance will publish an annual comparison of the costs of providers’ default investment options. Parents must be given the table before signing the contract.
The legal representative may also opt for self-directed management, rather than delegating investment choices to the provider. In that case, direct investments in shares and bonds may not exceed 30% of the portfolio’s total value. Mutual funds and ETFs may also be selected, provided the limits of the chosen investment profile are met.
Management will not be left unchecked: the provider will review each order before executing it and reject any that breach the rules. It will also monitor the portfolio’s composition and compliance with the selected profile and diversification rules at least once a quarter.
Withdrawal rules
Money may not be withdrawn before the beneficiary reaches the age of 18, except in exceptional circumstances, such as the death of the parent or beneficiary, or serious health reasons requiring surgery, certified by a public hospital.
Before the child reaches adulthood, the beneficiary’s rights may not be pledged or assigned, or seized, subject to specific provisions of mandatory law. The account will not form part of the parent’s or guardian’s bankruptcy estate.
If money is withdrawn in breach of the restrictions, the state contributions and the returns attributable to them must be repaid to the State. The account will not, however, be closed: it will continue with the remaining balance, and state contributions may resume when new private contributions are made.
Rights on reaching adulthood
When the beneficiary turns 18, the account will become their personal asset. They may withdraw all or part of the money, or transfer it to a deposit account, investment account or investment-linked insurance product. Neither the withdrawal nor the transfer will be taxed. If the money is transferred to another investment account, its investment history will be retained and the transfer will not be treated as a new contribution.
Contributions of up to €10,000 a year will not count as income of the minor or be included when assessing income or social criteria. The same will apply to the state contribution. Contributions will be exempt from tax on donations and parental gifts, while dividends, interest and capital gains credited to the account will be exempt from income tax.
The material on the bill notes, however, that it does not explicitly exempt contributions from the presumptions applied under the “pothen esches” source-of-funds rules. Accordingly, no specific exemption from checks on the origin of the money is provided.
If payments stop, there will be no penalty, seizure or account closure. The capital will remain invested and returns will continue to be credited, but the State will make no further matching contributions while there are no new eligible private contributions. If payments resume, the state contribution will restart, subject to the annual limits.