Top tips for getting the best savings account for your kids
We all want to provide the best starting point for your children in the future, and a lot of parents save money to keep for their offspring to be used for education, moving out or the general costs of being an adult. By just saving a small chunk of money a month you can save a lot of money for when your children turn 18. For example by saving £20 a month from birth you could get £4,320 (excluding interest), but up that to £50 a month and you’ll have £10,800 (excluding interest).
Don’t be afraid to change savings accounts
If you save money on a regular basis don’t be afraid to move your money if you find the interest rates are better in another bank. This might mean changing who the money with on a yearly basis but in the long wrong you could make a lot more money out of your children’s savings.
Look into Junior ISA’s
Generally ISA’s get higher levels of interest than a general savings account because you can only put a certain amount in each tax year and they’re free of tax. With a lot of them you can’t access them for a certain period of time (unless you pay a hefty fee). If you’re saving money for your children and don’t plan on taking it out until they’re much older an ISA can provide you with much higher levels of interest making your money go further. With a lot of Junior ISA’s these can be opened in the children’s name but they can’t take money out until they hit a certain age, usually 16 or 18.
Make your savings regular
There are some Kids Regular Savings accounts which as the names suggests this isn’t for a one off lump sum to be paid in but instead is a commitment to saving a regular amount of money for 12 months. These interest rates are more often than not higher than with a normal savings account as your bank have your commitment to money coming in every month. After your initial period the interest rate might go down but by looking around you may find another one on the market.
Look at Fixed- rate Children’s bonds
Fixed-rate Children’s bonds are another good way of getting a fixed level of interest where the rate will remain the same until maturity. You may get a lower level of interest for some months, but a higher level for others but you don’t need to keep checking the rates and shopping around with this as you’re safe knowing that your rate will not change during its term. This is good for one off lump sums of money which you want to be left untouched for a specific length of time.