Best investments for your child’s future in 2026

If there is one advantage children have in investing, it is time. The challenge is that children cannot invest on their own. That is where adults come in. By investing on a child’s behalf, you can put time to work early, giving investments more opportunity to grow through compounding, even when starting with small amounts. For many families, it is also a way to build good financial habits, from learning patience and understanding risk to seeing how financial markets work in practice. 

In Australia, families may use a range of approaches when planning for their children’s financial future, from simple, stable savings accounts to longer-term investment structures such as insurance bonds. There are also market investments, such as shares and ETFs. One more option to consider is a Minor Trust Account, which allows you to invest in shares and ETFs on behalf of a child (as trustee) and then transfer ownership when they turn 18. 

Why invest in your child’s future early?

Starting earlier can make a big difference because compounding is time dependent. Even small contributions can start to build up momentum when they’re invested over multiple years. Early investing can also help with: 

• Keeping pace with inflation. 

• Giving kids or grandkids a financial head start for things like education, housing, travel or their first car. 

• Supporting financial literacy. Kids can learn what shares, ETFs, dividends and diversification mean in real life. 

This can also apply when investing for grandchildren in Australia, where grandparents may make occasional lump sum contributions or regular deposits over a number of years. 

Key considerations before investing

Before choosing an investment, it can help to set a few simple parameters, such as how comfortable you are with market ups and downs, how much loss you may be willing to accept, and how hands-on or hands-off you want to be. 

Tax and legal basics

This is general information only, but a few important considerations include: 

• Who owns the investment? Some structures are in an adult’s name, while others could be held in trust for a child. 

• Income and distributions: Interest, dividends and distributions can be taxable, but it depends on the structure and individual circumstances. 

• Record-keeping: Keep track of contributions, dates, distributions, etc. 

If you’re unsure, seek independent professional advice, especially if you have trust and tax questions. 

Risks involved in long-term investing

There are a few risks of investing that you should be aware of, particularly because prices can rise and fall – sometimes very sharply.  For investments such as shares and ETFs, some of the risks that may be relevant include: 

• Company risk (a business performs poorly or changes strategy). 

• Sector risk (e.g. tech or mining cycles). 

• Currency risk (for international investments). 

• Behavioural risk (selling during downturns or chasing hype). 

Popular investment options for your child’s future

Here’s a beginner-friendly overview of popular options people consider when saving for their child’s future in Australia, from low-risk to higher-growth approaches.

High-interest savings accounts

Savings accounts can be simple and easy to understand. They are also generally low risk, so they’re suitable for:

• Short time horizons (1–3 years).

• Families prioritising capital stability over growth.

• Goals where you’ll need the money at a known time.

The downside? Returns can be modest and may not keep up with inflation, depending on economic conditions, rates and fees.

Insurance bonds

Insurance bonds are a longer-term option where investment earnings are taxed within the bond structure. They can suit families who:

• Want a set-and-forget approach.

• Prefer a structure that can simplify their tax reporting.

• Are investing for a medium-to-long horizon of around 10+ years.

Insurance bonds can, however, be complex to understand. Fees, underlying investment options and withdrawal rules differ between institutions, so reading the product documentation and seeking outside advice is a must.

Shares and ETFs

Shares and ETFs are often used for longer-term investment horizons. Their values can rise and fall over time, and this may involve periods of volatility. For beginners, mastering the art of what an ETF is might feel simpler than picking individual companies. Why? Because ETFs hold a ‘basket’ of assets.

Here’s a good way to think about shares vs ETFs for kids:

• Shares – whether ASX shares or international shares – can be more concentrated, which means higher potential ups and downs tied to one company.

• ETFs can diversify across many companies and sectors in one purchase.

If you’re looking for stocks for kids, some families start with broad-market ETFs, then add a small number of blue-chip companies later on as an education tool and with diversification in mind. 

Consider your child’s age and timeline

1. Investing for newborns or young children (10+ years horizon) 

With a decade or more in your pocket, some families prioritise diversified growth assets, understanding that values can fall at times. At this stage, long-term options commonly discussed include diversified ETFs or combinations of ETFs and shares, with the suitability depending on individual circumstances and risk tolerance. 

2. Investing for primary school-age kids (5–10 years horizon)

With five to 10 years, some families still want growth but are starting to think more about risk control and consider:

• A diversified approach (to avoid relying on one company or sector).

• A clearer plan for when funds might be needed (e.g. private-school costs).

• Quarterly or annual reviews to make sure the plan still fits.

This can also be a good age to involve the kids in learning about investing. Showing a simple chart and explaining why markets move, for example, can be an easy starting point.

3. Investing for teenagers (under five-year horizon)

Five years or less shifts the focus towards capital preservation:

• Cash and savings might be more relevant for your short-term goals.

• If investing, some people choose lower volatility options or set aside smaller allocations because there may be less time to recover from downturns.

• A simple plan can help you steer clear of reactive decisions in volatile markets.

If you’re weighing up the best long-term investments in Australia for family wealth-building, the teen years are the point where you decide whether money is needed soon or can stay invested into adulthood.

Get started with a minor trust account

A minor trust account is a flexible way to invest in a child’s name while you manage the account as trustee. The CMC Invest Minor Trust Account is structured so you open the account as trustee, fund it with any amount you choose, invest in shares or ETFs here in Australia or globally, and then transfer ownership when the child turns 18.

So, why do some families choose a minor trust account for their market investing?

• Global access to shares and ETFs, in addition to the ASX.

• One platform for research and tracking your watchlists and portfolio.

• A large investment universe with 45,000+ stocks and ETFs to choose from.

• Pricing that supports smaller investors, with $0 brokerage on select markets and conditions.

Whatever you decide, always read the product disclosure and seek expert advice.

Tips for getting started

• Set a goal: Education, first car, university, house deposit, etc.

• Start small: Regular contributions matter more than big one-offs.

• Diversify: Spread your exposure across multiple sectors and regions.

• Make it educational: Show kids how dividends and market swings work.

• Review: Performance can be reviewed periodically to track progress.

 Investing for a child’s future is rarely about finding a single perfect option. It is usually shaped by time, goals, costs, and how comfortable you are with market ups and downs. Whether you are considering savings, insurance bonds, shares, ETFs, or a minor trust account, the key themes tend to be starting early, staying consistent, and choosing a structure that fits your family’s circumstances. Over time, small, well-considered decisions can add up, while also creating opportunities to build financial understanding alongside long-term wealth.

If you’d like a flexible way to invest in shares and ETFs for a child, take a look at our Minor Trust Account.

Disclaimer: This article provides general information only. It has been prepared without taking account of your objectives, financial situation or needs. It is not to be construed as a solicitation or an offer to buy or sell any financial instruments, or as a recommendation and/or investment advice. It does not intend to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any financial instruments. You should consider your objectives, financial situation and needs before acting on the information in this article. CMC Markets believes that the information in this article is correct, and any opinions and conclusions are reasonably held or made on information available at the time of its compilation, but no representation or warranty is made as to the accuracy, reliability or completeness of any statements made in this article. CMC Markets is under no obligation to, and does not, update or keep current the information contained in this article. Neither CMC Markets nor any of its affiliates or subsidiaries accepts liability for loss or damage arising out of the use of all or any part of this article. Any opinions or conclusions set forth in this article are subject to change without notice and may differ or be contrary to the opinions or conclusions expressed by any other members of CMC Markets.