Only One Person Sent Me the IBAN

In June I wrote about opening a 529 on a whim and watching it turn into five figures in twenty-five months. The argument was simple: a gift that compounds beats a gift that gets played with for a week and is discarded.

Easy to write. Harder to actually do, because the doing part requires other people’s cooperation.

So on a trip to Europe I ran the experiment. Every time I sat down with a family member who has children, I asked three questions:

1. Do you have a bank account for your kids?

2. Do you have an investment account for them?

3. Do you actually use it?

Here’s what came back.

More than I expected, and the pattern was consistent: once a child hits about ten, an account appears.

The reason is logistics. The kid needs a card for the canteen, or pocket money that isn’t cash, or a way to pay for something on a school trip. The account exists to move money out, rarely to hold money in.

Which is useful for me — there’s somewhere to send money — and almost useless for the thing I actually care about, which is money sitting still for fifteen years.

This is where my assumptions fell apart.

I went in looking for the local equivalent of a 529 or a custodial brokerage account. There isn’t one. What the more forward-looking parents had instead, in France, was an assurance vie opened in the child’s name.

To my ear that sounds like life insurance, and it isn’t. It’s a tax wrapper you can invest inside — a euro fund for the safe portion, market-linked units for the rest — and there’s no minimum age to open one. The reason to do it early is a specific piece of French tax mechanics: the contract’s advantages kick in once it’s eight years old. Open it when a child is two and by the time they’re an adult the clock has long since run. Grandparents, uncles and aunts can pay into it. It can even be topped up as birthday and Christmas gifts, which is precisely the behavior I was hoping to encourage.