A new savings scheme for the next generation is being introduced under the bill submitted by Minister of National Economy Kyriakos Pierrakakis, which sets out the measures announced at the Thessaloniki International Fair (TIF) and is due to be put to a parliamentary vote in the coming days.

For every child for whom a new Individual Investment Account for Minors is opened, the Greek state will match the amount contributed by the family, up to a maximum of €1,200 a year. In other words, if parents deposit €100 a month for their child, the state will contribute a further €100 a month. By the end of the year, the child will have €2,400 in their account, before any investment returns are taken into consideration.

However, the maximum state contribution will not remain fixed. It will increase by 10% every five years, gradually keeping pace with rising prices and incomes.

The new Individual Investment Account for Minors (AELA) establishes a long-term savings and investment vehicle for children. Accounts will be available to open from the beginning of 2027 by the child’s legal representative and can be set up before the child reaches the age of two. Initially, therefore, the scheme will apply to children born in 2025 and thereafter.

Where can the account be opened?

The beneficiary must be a minor aged up to two, holding Greek citizenship or the citizenship of an EU Member State, provided they are a tax resident of Greece. The account will be opened with a provider, which may be a bank, a mutual fund management company, an insurance company or another eligible financial institution.

Contributions can be made by any natural or legal person, including parents, grandparents, relatives, godparents and even businesses (legal entities). The total annual contribution limit is set at €10,000 per child.

The state will also contribute, matching the amount paid in, up to an initial maximum of €1,200 a year. The state contribution will be credited to the account within 30 days of each payment made into the child’s account by private individuals.

Thus, if a family deposits €100 a month, it will have contributed €1,200 by the end of the year, with the state adding a further €1,200. The total amount accumulated during the year will therefore be €2,400, before investment returns or any charges. However, if the family contributes €5,000, the state will add up to €1,200, rather than matching the full €5,000.

What investment options can families choose?

The account’s capital will be invested exclusively in eligible financial instruments and products, including mutual funds and ETFs, as well as shares and bonds traded on regulated markets in the EU or the European Economic Area (EEA). Investments in crypto-assets and derivative products, leveraged products, structured products and certain alternative investments are excluded.

Cash deposits and money market funds are treated as cash and may not exceed 5% of the portfolio, subject to certain exceptions. Diversification rules and exposure limits will also apply to prevent the capital from becoming overly dependent on a single share or market.

The parent or legal representative will choose the investment profile for the child’s account, determining the combination of fixed-income investments and equities.

Four different investment models will be available:

• Conservative: 100% in fixed-income investments and 0% in equities.
• Balanced: 70% in fixed-income investments and 30% in equities.
• Growth: 30% in fixed-income investments and 70% in equities.
• Dynamic: 100% in equities.

If the parent does not make a selection, the funds will automatically be allocated to the Growth model by default, with capital protection for contributions. Three years before the child reaches adulthood, the default investment choice will automatically switch to the Balanced profile, unless the parent or the child’s representative specifies otherwise.

Regardless of any previous changes, however, a switch to a lower-risk profile will be permitted during the final three years before the child turns 18.

The capital guarantee

The capital guarantee (capital protection) covers private contributions up to the annual amount eligible for state matching — initially, up to €1,200 — as well as the corresponding state contribution. When the child reaches adulthood, the value of the investments acquired using these amounts must not be lower than their nominal value.

However, contributions exceeding the annual state-matching limit are not automatically protected. Additional capital protection may be selected for these contributions, but it will incur a separate charge payable by the private individual. This protection is provided through an irrevocable commitment by an EU credit institution or insurance company and is stipulated to remain valid even if the provider becomes insolvent. Its cost will be priced separately and shown as a distinct item in the single cost indicator.

Costs and transparency

The total annual cost of the default investment option may not exceed 0.50% of the account’s average annual value. Taxes, fees charged by regulated markets and the cost of capital protection, which is priced separately, are excluded from this limit.

The Ministry of National Economy and Finance will publish an annual comparative table showing the costs of the default investment options offered by all providers. The table must be made available to the parent before the agreement is signed.

Withdrawals and protection of capital

Funds cannot be withdrawn before the child reaches the age of 18, except in exceptional circumstances, such as the death of a parent or legal representative, the death of the beneficiary or serious health reasons affecting the child.

Before the child reaches adulthood, the beneficiary’s rights may not be pledged, assigned or seized, subject to specific provisions of mandatory law. The account does not form part of the parent’s or guardian’s bankruptcy estate.

If a withdrawal is made in breach of these restrictions, the full amount of the state contributions paid up to that point, together with the corresponding investment returns, must be repaid to the state. However, the account will not be closed and will continue to operate with any remaining balance. State contributions may resume once further private contributions have been credited to the account.

Tax incentives

Contributions of up to €10,000 a year do not constitute income for the minor and are not taken into account when applying income-related or social eligibility criteria. The same applies to the state contribution.

Contributions are exempt from gift tax and parental gift tax, while dividends, interest and capital gains credited to the account are exempt from income tax.

One significant change compared with the consultation draft is that the explicit exemption of contributions from the presumptive wealth and income tests used to establish the source of funds has been removed. Consequently, contributions will not be exempt from checks on the origin of the money.

What happens when the child turns 18?

Once the child reaches the age of 18, the account becomes a personal property right belonging to the beneficiary. The child may withdraw the entire amount, transfer the funds to a deposit account, an investment account or an investment-linked insurance product, or make a partial withdrawal.

Neither the withdrawal nor the transfer of the accumulated amount will be subject to tax. If the funds are transferred to an investment account, the investment history will be retained and the transfer will not be treated as a new contribution.

What can parents choose?

In addition to the ready-made investment models offered by providers, such as banks and insurance companies, there will also be an option for self-directed management. This will be available if the parent or legal representative has knowledge of the financial markets and wishes to select the child’s investments personally, rather than leaving the choice to the provider.

Under self-directed management, direct investments in shares and bonds may not exceed 30% of the portfolio’s total value. Parents may also choose mutual funds or ETFs, provided the limits of the selected investment profile are respected.

However, management will not be entirely unrestricted. Before executing any investment order received from the parent or the child’s representative, the provider will check it and reject any orders that breach the rules set out in the bill. It will also monitor whether the portfolio complies with the selected investment profile and diversification rules, carrying out checks at least once every three months.

What happens if contributions stop?

If contributions cease, there will be no penalty, seizure or closure of the account. In such cases:

• The existing capital will remain invested.
• Investment returns will continue to be credited to the account.
• The state will make no further contributions, as there will be no new eligible private contributions to match.

If money is deposited again at a later date, state matching will resume, subject to the applicable annual limits.

How will the state contribution increase?

The state contribution will initially amount to up to €1,200 a year for each child and will increase by 10% every five years.

The maximum annual state contribution will therefore rise progressively, from €1,200 during the initial period to €1,320 after the first five-year period, €1,452 after the second five-year period and €1,597.20 after the third five-year period.

The increase applies to the maximum state contribution, not to any mandatory payment by the family. Families will still be free to contribute whatever amount they wish and can afford, ranging from as little as €10 or €100 a year to as much as €10,000 annually. The state, meanwhile, will match contributions only up to the applicable limit at the time.

For example:

• If a family deposits €1,200 a year during the initial period (€100 a month), the state will add a further €1,200. The total capital accumulated over one year, before investment returns, will be €2,400.
• If, after five years, the state contribution limit has increased to €1,320, the family must deposit at least €1,320 during the year for the child to receive the maximum state contribution. The total annual capital, before investment returns, will then amount to €2,640.
• If the family contributes only €600 in a given year, the state will add €600, irrespective of the maximum contribution limit.