Saving for your Child: 8 Excellent Options
You can never start too early when saving up for your kid. Right from the moment he comes out into this world (even better if before that), you should already start planning for his future and saving up money for him. This means that it is never wise to wait until a few months prior to his entrance in college before you start thinking about your child's savings.
If you already have a child and you still have not done any saving for him, now is the time to start. Below are some of your best options to ensure that your child has a bright future ahead of him.
1. Savings accounts – these are bank accounts specialised for children. In a children's savings account, your child is entitled to fun and colorful passbooks, membership to kid's savings clubs and freebies like toys and school supplies. These are all provided by the bank to get your kid excited and motivate him to save money.
2. Cash accounts – another common type of saving vehicle for your kid. These savings accounts are available through high street banks and building societies.
3. National savings or investments bonds – these bonds as we know are a type of investment that gives you a tax benefit on the interest earned. This type of bond can be taken out for children aged up to 16 and usually pay a fixed interest rate for a specific period of time agreed upon.
4. Mini cash Isas – these accounts also have tax-free interests. An amount up to £3,000 for each tax year can be deposited into a mini cash Isa.
5. Investment trusts or unit trusts – aside from saving, you can also consider investing for your child's money such as in the stock market, which is known to give better returns than savings over long periods. The only downside to this is that you may experience some losses if the company you invested in does not perform well.
6. Tax exempt friendly society schemes – these schemes, which are often aimed at savings for children, would only require you to pay low regular contributions. Although the premiums are low, take note that these schemes can be costly and inflexible.
7. Stakeholder pensions – these are a type of personal pensions that are now used as a form of children's savings.
8. Child trust funds – these are funds opened by parents or legal guardians in the name of the child which he or she can only access at the time the kid reaches a certain age. Children in the UK born after August 31, 2002 are entitled to £250 voucher from the government that can be used to open up a child trust fund.
Saving up money for your kid's future is not an easy task. Just like everything about parenthood, it demands a lot of your time, effort and a few sacrifices here and there. But at the end of the day, you know that it would be all worth it because you are doing this for your precious little one.
If you already have a child and you still have not done any saving for him, now is the time to start. Below are some of your best options to ensure that your child has a bright future ahead of him.
1. Savings accounts – these are bank accounts specialised for children. In a children's savings account, your child is entitled to fun and colorful passbooks, membership to kid's savings clubs and freebies like toys and school supplies. These are all provided by the bank to get your kid excited and motivate him to save money.
2. Cash accounts – another common type of saving vehicle for your kid. These savings accounts are available through high street banks and building societies.
3. National savings or investments bonds – these bonds as we know are a type of investment that gives you a tax benefit on the interest earned. This type of bond can be taken out for children aged up to 16 and usually pay a fixed interest rate for a specific period of time agreed upon.
4. Mini cash Isas – these accounts also have tax-free interests. An amount up to £3,000 for each tax year can be deposited into a mini cash Isa.
5. Investment trusts or unit trusts – aside from saving, you can also consider investing for your child's money such as in the stock market, which is known to give better returns than savings over long periods. The only downside to this is that you may experience some losses if the company you invested in does not perform well.
6. Tax exempt friendly society schemes – these schemes, which are often aimed at savings for children, would only require you to pay low regular contributions. Although the premiums are low, take note that these schemes can be costly and inflexible.
7. Stakeholder pensions – these are a type of personal pensions that are now used as a form of children's savings.
8. Child trust funds – these are funds opened by parents or legal guardians in the name of the child which he or she can only access at the time the kid reaches a certain age. Children in the UK born after August 31, 2002 are entitled to £250 voucher from the government that can be used to open up a child trust fund.
Saving up money for your kid's future is not an easy task. Just like everything about parenthood, it demands a lot of your time, effort and a few sacrifices here and there. But at the end of the day, you know that it would be all worth it because you are doing this for your precious little one.
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