I am thinking of setting up a trust fund for my children. I am wondering if there are any differences between setting up a saving account and a trust fund?

Update, I am in New Zealand.


1 Answer 1


Well, first off, if your children are NZ citizens, they can borrow money at 0% interest for tertiary education and I don't see any benefit to not taking free money.

A saving account is your money, and will accrue a little bit of interest and you will pay tax on that.

A family trust (I hope this is what you mean by trust fund) is a separate financial entity that can be set up to own assets for the benefit of multiple people. For example, if you have a rental property or business and you want the income divided between your children, rather than coming to you, or if you have a bach you want to keep in the family after you die.

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