Austria plans 500 euro investment accounts for newborns

Every child born in Austria from 2027 is set to receive 500 euros from the state for long-term investment, under a proposed scheme the government says will encourage families to save. ORF reported that banks broadly welcomed the plan but warned against relying solely on artificial intelligence for investment decisions.

Parents, grandparents and other relatives would be able to add up to 5,000 euros a year. The account’s value, including investment gains, would be exempt from the 27.5 percent capital gains tax until the child turns 18. The money would belong to the child and generally remain locked until adulthood; after that, the account could be kept open or the funds used.

Reinhard Schwendtbauer, head of Raiffeisen OÖ, an Upper Austrian bank, said the scheme could help young people prepare for their financial future. Stefanie Christina Huber, head of Sparkasse OÖ, another Upper Austrian bank, welcomed the greater attention to securities investment and financial markets.

Markus Auer, head of the VKB bank, supported tax-advantaged saving but said the benefit should continue beyond the child’s 18th birthday. He argued that personal provision could reduce the burden on the state later.

Banks said artificial intelligence could support investors but should not replace professional advice. Hypo OÖ chief executive Klaus Kupfmüller said AI could not assess an investor’s risk tolerance, investment horizon or reasons for investing. Oberbank chief executive Franz Gasselsberger also stressed the importance of understanding customers’ risk profiles and having someone to turn to if investments lose value.

Some people are already using AI to research stocks and funds. IT technician Thomas Kraus said he enters information about Voestalpine shares into an AI tool to help decide what to do next.

Huber said the average monthly savings amount had fallen somewhat recently, but remained higher in Upper Austria than the national average. “Saving is in trend,” she said.