Betashares Kids Accounts (Is it the right way to Invest For Your Kids?)

I get a fair few emails from parents who say they want to “set their kids up for the future”.

Most fall into one of two camps.

Camp 1: Keep it simple… maybe too simple.
They want to buy an ETF (or 2 or 3) in their own name, mentally label part of the portfolio “for the kids,” and call it a day. It works, but it blurs ownership, makes tax awkward, and creates headaches when the time comes to hand it over.

Camp 2: Make it complex… maybe too complex.
They want to go all in set up formal trusts, special bank accounts, or multi-layered structures to “do it properly.” It’s thorough, but often more admin and cost than their actual investing needs justify.

I've spent some time looking into the Betashares Kids account options which sits neatly in the middle.

It gives you a dedicated investing structure for a child (clear ownership, clean record-keeping, and a simple way to invest in ETFs and shares) without the cost or complexity of a formal trust or complicated investment bond products.

It just means things are a lot easier for parents to actually invest for their kids (not just save) using ETFs and shares, with very low minimums and no brokerage.

This post will walk through:

• What the Betashares Kids account is
• How it’s set up legally and for tax
• The pros and cons compared to other options
• How you might actually use it in real life

Betashares Kids Accounts are a solid option for long-term investing, but the fee structure can be expensive for balances under $10,000. If you’re starting small or contributing irregularly, make sure you understand the monthly portfolio fees before you open an account. This article explains the benefits and the potential cost traps so you can decide what fits your situation.

This is general info only, not financial advice. Talk to a professional before acting on anything here, especially around tax.

Why bother investing for kids at all?

Kids have one big superpower we don’t: time.

The longer money is invested, the more compounding (earning returns on your returns) gets to do its thing.

• A one-off $5,000 investment at birth, earning 9% per year on average, could grow to around $23,500 by age 18.
• Putting in $100 a month from birth to 18 at the same 9% could grow to around $53,000 – more than 40% higher than the total money you put in.

Those numbers are hypothetical and based on long-term share market returns, not a guarantee. But the basic idea stands:

Start early + stay consistent = give Future Adult Kid a huge head start.

What is a Betashares Direct Kids account?

The Kids account is simply a Betashares Direct account where an adult invests on behalf of a child under 18.

Under the hood, it uses what’s called an informal trust (or “minor trust”).

• The adult is the trustee – they control the account and make the decisions.
• The child is the beneficiary – it’s for their benefit, and the money can be transferred to them when they’re older.

From inside Betashares Direct, a Kids account works very much like a normal account:

• You can buy and sell ETFs and 400+ ASX shares
• You can use Auto-invest to drip money in regularly
• You can use Managed Portfolios or build your own custom mix
• You can create multiple Kids accounts under the one login (handy if you have more than one child)

The big headline features they’re pushing:

• Invest from as little as $10 (the minimum order size)
• Zero brokerage on all ETFs and 400+ ASX shares
• Recurring investments and Auto-invest to help build habits
• Educational resources aimed at parents investing for kids

How does this compare to other “invest for kids” options?

You know you can invest for your kids but the real question is which path you take to do it.

Here's some options

1. Informal trust (like Betashares Kids account)
   • Simple and cheap
   • Parent controls the account
   • Child is the beneficiary
   • Common choice for kids investing accounts
2. In your own name
   • You invest as yourself and mentally earmark the money for the kids
   • Very simple, but the income and capital gains are taxed at your rate
   • Transferring it later may trigger capital gains tax
3. Formal trust
   • Involves a legal trust deed
   • More flexible and powerful for estate planning
   • More complex and more expensive to run and lodge tax returns
4. Investment bonds
   • Tax paid at 30% inside the bond
   • Can be tax-effective for high-income earners if held for 10+ years
   • More of a “set and forget” product
5. Super for kids
   • Possible, but the money is locked until their retirement
   • Ultra long-term. Great for theory, not as useful for helping with uni, first car, or a house deposit.

The Betashares Direct Kids account leans on option 1 the informal trust.

It keeps things pretty straightforward while still clearly separating kid money from adult money.

How the investing side actually works

Once you’ve opened a Kids account, you choose what to invest in.

Some options:

• Professionally managed portfolios – Betashares Managed Portfolios you can just plug into
• DIY ETF mix – build a simple “core” portfolio (e.g. broad Aussie or global shares)
• Add a few individual ASX shares your child recognises (Woolworths or Qantas, etc.) as a learning tool
• Growth assets – mainly shares and share ETFs. Higher long-term return potential, but more ups and downs.
• Defensive assets – bonds and cash. Lower expected returns, but smoother ride.

For a child with a 10–18 year time frame, parents could tilt heavily to growth assets, because they have time to ride out volatility.

As they get closer to needing the money (e.g. late teens), you might slowly add more defensive assets.

You can keep it insanely simple like me and go all in on one one broad, low-cost ETF, auto-invest every month, ignore the noise. Not advice, just and example of what I do!

Fees and brokerage for Betashares Direct Kids

When you’re investing for kids, the dollar amounts are often small, especially at the start.

That makes fees and brokerage a much bigger deal.

Two big things Betashares does here:

• Zero brokerage on all ETFs and 400+ ASX shares inside Betashares Direct
• Invest from $10, using dollar-based orders (you can invest the exact amount, not just whole units)

That makes it a lot more practical to do $20, $50 or $100 per month per child without brokerage eating half your contributions.

The Fee Trap parents might not see

Betashares promotes the idea of starting with $10 and paying zero brokerage.

Technically true, but here’s the part buried in the fee table:

If you’re using a Custom Portfolio (which is what you’ll use if you’re buying ETFs) you pay:

• $3 to $4.50 per month
• Until your balance hits $10,000
• On top of the ETF’s internal management fees

That’s $36–$54 per year, regardless of how much you actually have invested (if it's under 10k).

For small balances, this is a deal-breaker.
A $500 kids portfolio losing $36 a year is taking a 7% hit, before the ETF even starts working.

It actually isn't better if you use a Betashares prebuilt portfolio with that requiring $3 a month if under $10k.

Personally I feel that .50% pa is the limit I would pay for management fees so that equates to a balance of at least $7500 in this platform.

The irony is Betashares markets the platform as beginner-friendly, but the fee structure only becomes cost-effective once the account is already above $10k.

If you want to start small, the smarter option is to avoid Betashares kids entirely and stick to a single ETF (or two) through a normal broker… or use Betashares Direct only after the balance grows.

Custom portfolio fees

Managed portfolio fees

Tax rules for kids’ investments (high level only)

In Australia, minors (under 18) have special tax rules to stop parents from just shifting income into their kids’ names to pay less tax.

Betashares summarises it like this:

• If the child is the beneficial owner (the money is truly for them), the investment income should be declared in their name.
• For kids, tax-free income is up to $416 per year.
• Income between $417 and $1,307 is taxed at 66%.
• Income above $1,307 is taxed at 45% (no Medicare levy).

Importantly:

• With a Kids account, you need to provide the trustee’s (parent’s) TFN to avoid automatic 47% withholding tax on account income.
• Whether income is declared under the child or the parent depends on who is actually the beneficial owner – this is where proper tax advice matters.

If you’re planning to invest serious amounts, or grandparents are gifting large sums, speak to an accountant. There are cases where a different structure (formal trust, investment bond, etc.) may make more sense.

What happens when your child turns 18?

At some point, you’ll want to hand over control.

The guide notes that if the child has always been the beneficial owner, investments can often be transferred into their own name at 18 (or older) without triggering capital gains tax, as long as the beneficial ownership hasn’t changed.

To support that, it’s smart to:

• Keep good records of gifts and contributions
• Use a dedicated bank account in the child’s name (with you as trustee) for gifts and dividends
• Keep any documentation that clearly shows the money was always intended for the child

Again: tax advice. Boring but important.

How to actually set up a Betashares Kids account

You can sign up on web or mobile.

Once it’s open, you can:

• Switch between your own account and each Kids account using the same email login
• Create multiple Kids accounts if you have more than one child
• Turn on Auto-invest and forget about it (in a good way)

Ideas for using a Kids account in real life

Here are a few simple ways a family might use this (purely examples, not recommendations):

• Birthday & Christmas money funnel
  • Any cash gifts from family go straight into the child’s Kids account.
  • Once a year, you sit down with them, show the balance, and explain what’s happening.
• Pocket money upgrade
  • If your child gets pocket money, you might say:
    • “You can spend half, and we’ll invest half into your Kids account each month.”
  • Use the app to show them what they actually own.
• Teenager “first car” plan
  • From age 10–12, start putting $50–$100/month into a growth-heavy portfolio in their Kids account.
  • When they’re 16–18, start de-risking a bit and talk about whether they want to use it for a car, travel, uni costs, or leave it invested.

You also get a nice teaching angle:

• For younger kids: use “spend / save / invest” jars (barefoot investor style) and show them their account once a year
• For older kids: let them help pick an ETF or a company, review the portfolio together, even get them to “pitch” a stock or ETF to you like a mini Shark Tank.

The goal isn’t to turn them into day-traders. It’s to normalise the idea that investing is something you do regularly, in the background, for your future.

Pros and cons of the Betashares Kids account

Pros

• Low minimums – start from $10
• Zero brokerage on a wide range of ETFs and shares
• Easy automation with Auto-invest and recurring deposits
• Multiple kids under one login
• Clear, simple structure (informal trust) that most parents can understand
• A chance to teach kids about investing using real numbers, not just theory

Cons / things to watch

• Kids’ tax rules are weird and harsh once income goes over $416 a year – you need to understand how that works for your situation
• If you want complex estate planning or large gifts (think $100k+), you might need a formal trust or different structure
• As with any investing, market risk is real – balances will go up and down

Final thoughts

I like this move from Betashares.

It takes something most parents want to do (“I should invest for the kids… one day”) and makes it:

• Simple
• Low-cost
• Easy to automate

If you’re already investing yourself and you want your kids to grow up seeing investing as a normal part of life, a Kids account like this can be a neat, practical tool.

Just remember:

• Read the PDS and TMD for Betashares Direct and any ETFs or portfolios you use.
• Get tax advice if you’re unsure who’s the beneficial owner or how income should be declared.
• Focus on time and consistency, not trying to be a genius stock picker.

Start small, keep it boring, let time do the heavy lifting – that’s the real “kids’ investing hack”.