KiwiSaver might not be the first thing on your mind when you’re pacing the floor with a newborn at 3am, or juggling after-school activities, but investing early could give your kids a real financial leg up. But is KiwiSaver the right option for under-18s? And if so, when’s the best time to sign them up?


Is there any point in joining KiwiSaver before 18?

In short: yes. While kids aren’t eligible for government or compulsory employer contributions until they’re 18, KiwiSaver is a long-term investment fund and that means the earlier you start, the more time their money has to grow.

What are the key benefits?

• Compound returns: Starting young gives investments time to grow and benefit from compounding returns, that magical snowball effect where returns earn more returns over time. (more info below.
  

• A financial education tool: KiwiSaver is a great way to start teaching kids about money, talking about long-term saving and helping them set financial goals.
  

• A deposit for their first home: Even small regular contributions can add up to something meaningful by the time your child is in their 20s (or 30s) and ready to buy their first home
  

• It’s locked in: Unlike savings accounts, money in KiwiSaver can’t be withdrawn for short-term spending.

What’s the best way to contribute?

There’s no one right way,  it depends on your situation. Here are three examples to illustrate the impact of different strategies, assuming a 4.5% return after tax and fees:

1. One-off lump sum: Put in $5,000 when your child is born, leave it untouched in a growth fund - by age 18, they could have around $11,000, with $6,000 of that being compounding returns.
   

2. Regular contributions: Invest $10 a week from birth. By 18, they’d have around $14,000, with around $5,000 coming from returns.
   

3. A hybrid approach: Start with $2,000 upfront, then contribute $15 a week. That could grow to nearly $26,000 by age 18 - almost $10,000 in returns alone.

All families are different and have different capacities to save, and that’s ok. Even small, consistent contributions make a difference. And once your child gets their first job, you can encourage them to contribute too.

What about fees?

Fees vary widely between providers and can eat into returns, especially when balances are small. Some providers charge flat annual fees, which can be disproportionately high for kids’ accounts. Most charge a percentage of your balance (e.g., 0.25%–2%).

If you’re starting with small regular contributions, consider providers that don’t charge fixed fees. For example, Simplicity charges a single management fee of 0.25% across all KiwiSaver funds. You can compare fees and providers using tools at sorted.org.nz.

Who can set up and contribute to a kid’s KiwiSaver account?

Only a parent or legal guardian can open a KiwiSaver account for a child, but anyone can contribute once the account is set up - grandparents, godparents, aunties and uncles. Instead of another toy at Christmas, a deposit into KiwiSaver could be a meaningful gift for their future.

What fund should you choose?

Because kids typically won’t access their KiwiSaver funds for many years, they’re considered “ideal investors” - they have a long timeframe and can ride out market ups and downs.

That means growth or high-growth funds are often a good fit. They’re more volatile in the short term but can deliver higher returns over time. As always, think about your goals and risk tolerance. Our Fund Finder is a great place to help you find the right fund for your child.

Any drawbacks?

There are a few things to consider before diving in:

• No government or employer contributions until age 18 (and even then, only if they’re working and contributing themselves).
  

• Funds are locked in until a first home purchase or retirement — not suitable for short- or medium-term savings goals.
  

• Documentation and set-up can take a bit of effort: You’ll need birth certificates, guardian IDs and IRD numbers.
  

• Kids gain full control at 18 when the account is legally theirs. This could be a benefit rather than a drawback, but does mean they could make changes you might not agree with.

This last point can actually be a great opportunity for a financial conversation with your child, if you haven’t already. Talk to them about why you opened the account, what the savings are for, and how they can use it wisely.

Is KiwiSaver always the right option?

Not necessarily. Some parents might prefer to keep savings more flexible - so it can be used for education, travel or other goals. In this case, non-KiwiSaver investment funds might be a better fit as they offer easier access.

In some cases, families choose to do both: KiwiSaver for long-term savings and another investment account for shorter-term goals.

Final thoughts

Whether you start with $10 a week or a lump sum from grandma, KiwiSaver can be a smart way to set your child up for the future. And it’s not just about the money - it’s about starting conversations and building good money habits from the beginning. If you’ve been meaning to get around to it, there’s no perfect time - just start. Because the earlier you plant the seed, the more time it has to grow.


More resources

Podcasts:
Money Made Simple #4 | The magic of compounding returns, explained
Money Made Simple #22 | Nest eggs for little Kiwis: Is KiwiSaver the best way to save for your child’s future?

Blogs:
Why you should open a KiwiSaver account for your kids, by Sam Stubbs (published on Stuff)
Skip the plastic and gift children a better financial future

Other websites:
sorted.org.nz
MoneyHub - KiwiSaver for Kids

The information provided and opinions expressed in this post are intended for general guidance only and not personalised to you. These materials do not take into account your particular financial situation or goals and are not financial advice or a recommendation. This post is not intended to convey any guarantees as to the future performance of any of the investment products, asset classes, or capital markets mentioned. Past performance is no guarantee of future performance. Information is current at the time of posting, and subject to change without notice. Simplicity NZ Ltd is the issuer of the Simplicity KiwiSaver Scheme and Investment Funds. For Product Disclosure Statements please visit our website simplicity.kiwi.