rising costs of living and children's education, it is important to start
saving as soon as possible for your child. With a plethora of child savings
accounts around at the moment it is important to look around and make sure
you are getting the most back from your child's savings.
Children's savings accounts work in a similar to adult savings accounts.
There are different types of account:
Bonds or Term
Most children's savings accounts are easy access allowing money to be
withdrawn without notice or penalty. Some accounts require notice to be
given before a withdrawal, to allow a penalty-free withdrawal. These
accounts normally offer a higher level of interest than easy access
accounts. Bond accounts offer the highest interest but to receive this, the
money invested normally has to be left in the account for a specific period.
This could vary from 1 year, up to 5 years or some providers require money
to be left until the child has reached a certain age.
There is no minimum age for a children's account to be opened, however most
providers require a parent or guardian to open and run the account until the
child is between 7 - 11 years old. Most accounts run until the child is 18
years old when, if not specified at the time, will be transferred over into
an adult savings account.
To encourage a child to save their money many providers offer incentives
when an account is opened. This can range from posters to vouchers to naming
the account themselves. The idea behind this is to start to encourage
children to take an interest in saving money. However, the gift is not the
most important part of an account so look beyond it and find out what
interest rate is offered on the account.