Kids investment account

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Forums › Finance and wealth management › Kids investment account

David321

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#323905 2-Feb-2026 08:03

Hi all,

I have a Kernel Wealth account for my 4 year old daughter as from memory they had low fees and good returns for generic investing. I opted not to set it up in my child's name as they transfer ownership when the child turns 18 and I am not confident 18 is a good age to come into a large amount of money and spend it wisely. I know I pay more tax that I would if it were in my childs name, but I still think its worth it to keep control after they turn 18.

I also opted for a generic investing account and not Kiwisaver as I prefer to be able to let my child use the money for what they please that I deem smart, such as education etc.

Now I am looking to set one up for my son, I was leaning towards setting up another Kernel account because its what I know and am familiar with it, but I do remember a finance guy always saying to spread investments for different people in your family across different companies incase one goes belly up, then only one person looses their money and not everyone.

With that advice in mind I was curios if it is a good idea to choose another company and if so what are some good ones out there that have low fees and good performance like Kernel?

_David_

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#3457824 2-Feb-2026 08:43

You should be fine investing with Kernel again, as even if Kernel goes toes-up, your investment management can be taken over by another company. (If I'm wrong about this, someone please correct me.)

Perhaps for all kids, split their investments across a one/two different high-growth funds and one/two medium growth/risk. They aren't expecting or planning on the money, so it doesn't matter if their investment account balance is a little volatile.

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acetone

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#3457827 2-Feb-2026 08:47

If your main issue with a kids account is that they get access to it when they are 18, have you thought about transferring it out before they are 18?
I haven't looked into it, I would be interested to hear what other people think of that.

Qazzy03

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#3457999 2-Feb-2026 12:34

I think people would be setting themselves up for an emotional/family/legal drama landmine creating bank/investment accounts for their children and then deciding that they are not adult enough to have that money that has been gifted to them.... Legally it is your child's money if it is in their name and you are acting as a custodian for the account.

Think about it from your childs POV, and legally you might be on very shakey ground.

https://bankomb.org.nz/guides-and-cases/quick-guides/bank-accounts/childrens-accounts

This is not financial advise and I am not an expert in this field.

If you want that type of control, keep it in your name and gift it when you decide to.

David321

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#3458058 2-Feb-2026 13:09

Qazzy03:

I think people would be setting themselves up for an emotional/family/legal drama landmine creating bank/investment accounts for their children and then deciding that they are not adult enough to have that money that has been gifted to them.... Legally it is your child's money if it is in their name and you are acting as a custodian for the account.

Think about it from your childs POV, and legally you might be on very shakey ground.

https://bankomb.org.nz/guides-and-cases/quick-guides/bank-accounts/childrens-accounts

This is not financial advise and I am not an expert in this field.

If you want that type of control, keep it in your name and gift it when you decide to.

Yeap this is exactly why I decided to set it up in my name, I will pay a few grand more in tax (worked it out) but the potential headache of having it in their name, then transferring to myself when they turned 18 and all the questions that might get asked at the time by IRD and Kernel Wealth. It was very hard to get a straight answer to this even from accountants so I played it safe and am happy knowing I have 100% control of the money. 18 is to young to have 10's of thousands to your name to do with what you please (for most kids anyway).

_David_

Basil12

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#3458137 2-Feb-2026 21:30

I've had Hatch and InvestNow accounts in my children's names with nothing automatically transferred over to them when they turned 18. I was the only one with the password (my and their accounts shared a single username and password account per platform).

I have since arranged with InvestNow to set up their accounts with their own access but it was something I had to initiate, not something that automatically happened when they turned 18. Same with Hatch.

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Qazzy03

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#3458142 2-Feb-2026 22:22

Basil12:

I've had Hatch and InvestNow accounts in my children's names with nothing automatically transferred over to them when they turned 18. I was the only one with the password (my and their accounts shared a single username and password account per platform).

I have since arranged with InvestNow to set up their accounts with their own access but it was something I had to initiate, not something that automatically happened when they turned 18. Same with Hatch.

This is a slightly different use case to OPs tho.
Your use case was Hatch and investNow did not have a process to automatically transfer/change over to an adult account.

OPs use case was wanting the possiblity to retain control once their child(ren) turns 18.

However the money is legally the child's and they can request the transfer to their account when they are 18.

https://help.hatchinvest.nz/en/articles/4785438-what-will-happen-to-my-kids-accounts-when-my-child-turns-18

Sure OP could not mention the account but, the investments would show up on their IRD tax statements if they were generating any income.
If OP bought stocks that don't return dividends or PIE technically, they might not find out about them that way.

I have no clue what those companies internal processes are if a kids account don't get transferred or what processes they might develop over the years.
Aka they could do proactive outreach, to onboard new adults in the future.

I feel the best way to achieve OP's desired use case would be to retain the money in their name until they are willing to gift it.

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MikeAqua

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#3458410 3-Feb-2026 14:12

I've had great performance out of Milford Asset Management and I know others who have too.

There are two options for what you want to do .... set it up in your name and the interest gets taxed as if it's your income .... or set up a trust that vests when your kids turns 25 (or whatever).

Mike

David321

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#3458415 3-Feb-2026 14:17

MikeAqua:

I've had great performance out of Milford Asset Management and I know others who have too.

There are two options for what you want to do .... set it up in your name and the interest gets taxed as if it's your income .... or set up a trust that vests when your kids turns 25 (or whatever).

I vaguely remember tossing the idea of using a trust to skirt the issue of kids having access to it when they were 18, but from what I heard as trusts are now taxed I would be paying double tax (once for PIE and once for the value of the trust annually). Or something like that.

For now I have simply opened another account with Kernel using my wife's details. Kernel have advised me its on their "road map" to be able to manage multiple accounts or "goals" as they call them, meaning that if they do follow through with that in the future we can use one login to monitor both kids accounts which will be handy and save logging into two different accounts to check each kids balance.

_David_

tweake

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#3458474 3-Feb-2026 17:58

Qazzy03:

I think people would be setting themselves up for an emotional/family/legal drama landmine creating bank/investment accounts for their children and then deciding that they are not adult enough to have that money that has been gifted to them.... Legally it is your child's money if it is in their name and you are acting as a custodian for the account.

Think about it from your childs POV, and legally you might be on very shakey ground.

https://bankomb.org.nz/guides-and-cases/quick-guides/bank-accounts/childrens-accounts

This is not financial advise and I am not an expert in this field.

If you want that type of control, keep it in your name and gift it when you decide to.

this is why i like kiwisaver. they can't touch it and other people can't touch it. let it sit and let the years do the work.

but nothing wrong setting up a separate investment as well, so you can give the kids gift for education etc.

ANglEAUT

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#3458515 3-Feb-2026 22:33

tweake:

this is why i like kiwisaver. they can't touch it and other people can't touch it. let it sit and let the years do the work.

...

Wish my kids would give me the IRD # for the grand-kids so that I can deposit the funds into the grand-kids KiwiSaver.

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Dynamic

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#3458532 4-Feb-2026 08:30

ANglEAUT:

Wish my kids would give me the IRD # for the grand-kids so that I can deposit the funds into the grand-kids KiwiSaver.

Have they given you a sensible reason as to why not?

Keep in mind that they could potentially withdraw these funds if they can make a plausible hardship claim or for buying their first home. This may or may not fit your picture of how the funds should be used.

You could also set up an investment account for the grand kids but in your name. In your will you can specify 'the funds in InvestNow account are to be distributed equally amongst my grandchildren, including/excluding step-grandchildren, and must be deposited into their Kiwisaver accounts'.

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acetone

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#3458548 4-Feb-2026 08:36

David321:

I vaguely remember tossing the idea of using a trust to skirt the issue of kids having access to it when they were 18, but from what I heard as trusts are now taxed I would be paying double tax (once for PIE and once for the value of the trust annually). Or something like that.

For now I have simply opened another account with Kernel using my wife's details. Kernel have advised me its on their "road map" to be able to manage multiple accounts or "goals" as they call them, meaning that if they do follow through with that in the future we can use one login to monitor both kids accounts which will be handy and save logging into two different accounts to check each kids balance.

You can do this with InvestNow, you can have multiple investment profiles under the same email address and under your name. You could create a profile specifically for the funds you want to invest in for the kids.

David321

507 posts

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#3458611 4-Feb-2026 10:40

acetone:

David321:

I vaguely remember tossing the idea of using a trust to skirt the issue of kids having access to it when they were 18, but from what I heard as trusts are now taxed I would be paying double tax (once for PIE and once for the value of the trust annually). Or something like that.

For now I have simply opened another account with Kernel using my wife's details. Kernel have advised me its on their "road map" to be able to manage multiple accounts or "goals" as they call them, meaning that if they do follow through with that in the future we can use one login to monitor both kids accounts which will be handy and save logging into two different accounts to check each kids balance.

You can do this with InvestNow, you can have multiple investment profiles under the same email address and under your name. You could create a profile specifically for the funds you want to invest in for the kids.

I used AI to look at options, this is what it said about InvestNow

Looks like a good alternative but I didn't like the idea of selecting which funds to invest in specifically, from what I gather from the below there is no generic "High Growth" fund or something similar?

_David_

tweake

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#3459288 6-Feb-2026 10:35

ANglEAUT:

tweake:

this is why i like kiwisaver. they can't touch it and other people can't touch it. let it sit and let the years do the work.

...

Wish my kids would give me the IRD # for the grand-kids so that I can deposit the funds into the grand-kids KiwiSaver.

one thing i misspoke on, is the kids parents still control the kids kiwisaver.

unfortunately many (if not most) kiwi parents do not teach finance to their kids. opening a kiwisaver for the kids asap is the best thing ever. compounding interest performs miracles. the power of 18 years of compounding interest and how much gain you get by the time the kid is 18. make your kids understand just how powerful and important starting early is.

the one thing i completely despise is that kiwisaver is open to the housing market. the worse thing they could have ever done, as now kiwisaver gets exploited for housing profit and removes a big chunk of retirement income. the more kids save for retirement the more house prices will go up to capture it.

MadEngineer

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#3459310 6-Feb-2026 11:29

^ that depends on how the value of property rises vs kiwisaver. i can't help wonder if money spent to offset a mortgage to buy a house earlier would be more beneficial than compounding interest. who knows, world population is peaking so what that will do to housing demand. no signs of that yet here in nz though. worked for us - we just sold a house (rental) for three times the amount we purchased it for 14 years later.

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