Caring about your children doesn't take only your current care but also for their future. With the university taxes increasing and the lump sums needed from first time buyers it is a good idea to start saving early. Making sure that they have a good financial start is a primary topic and that's why children savings accounts are so popular. The market is flooded with options and it's hard to choose which one will serve the purpose best.
There are few tips that you need to follow through to get the account with most benefits and top rates.
- Age – check that your child will be eligible for your selected accounts. Some of them will have an age limit to a certain age. This is because the access is restricted until they reach that age and till then the account signatory is obliged to operate with the account. When looking for a children savings account make sure you are looking at ones that your child is eligible for.
- Types of accounts ' there is a great variety of accounts "as many as available for adults" from instant access ones to ISAs. It all depends on what you can afford to put aside. If you have a lump sum go for a fixed rate bond. If you're planning to regularly pay money into these savings then consider regular children savings accounts. To save tax free - go for an ISA. It is a myth that kids' savings are tax free. If an amount larger than the minimum tax free amount regulated each year is paid into your kid's account, you will be liable to tax. Of course most children earn a lot less than this amount in savings so they are in effect tax free.
- Compare accounts to get the best rates. There are many different accounts with different terms and rates so try to get out the most of your money.
- Minimum opening balance - some accounts have such restrictions. They usually are with higher interest rates. So prepare to invest more as a starter to get better rates.
- Don't be tempted by freebies - many banks or building societies will try and tempt you with freebies but don't waste your time with these.
Here are the top 3 accounts for kids based on our research on the market for the past 12 months:
|Halifax Kids Monthly Saver||
/fixed for 12 months/
|Barclays Children's Regular Saver||
/fixed for 12 months/
The best way to make a comparison between accounts is to visit KnowYourmoney.co.uk or MoneySuperMarket.com. You will be able to filter the accounts and get the best possible account on the market for your requirements.
InvTrusts.co.uk have drawn an investment plan tailored for children. It allows great freedom as to whether you should pay in this month or next month and has no fixed terms. The investment plan is open to anyone over the the age of 18 who wants to start investing for their child.
The information on this page is designed to help you understand more and make more informed choices. We do not receive any commissions, instead we are funded from companies that we advertise on our website.
You may also wat to read about: Junior Isas