Saving is an important part of life, and there’s never a time like the present to start teaching your children about how to make their money grow.
Recent statistics released by specialist insurer, Partnership revealed that children in 2014 are better off thanks to the “Bank of Grandma and Grandpa”. Last year, Britain’s 14 million grandparents collectively gave their grandchildren £2.8bn – a sizeable amount which would’ve been handed over in cheque form for Christmas and birthdays.
Setting up a savings account for your child is a guaranteed way to ensure their money is invested wisely, and just like those available for adults – there are plenty of accounts around that offer a variety of services and competitive interest rates.
Take a look at some of the best bank accounts available for depositing your children’s savings:
Often, interest rates on children’s accounts will be better than those offered on standard accounts. While HSBC’s Future Saver for Children account pays 0.5% interest, the Co-operative Bank’s Bonus account offers just 0.25%, and not to mention a £10 annual cash bonus from age 13 to 18.
Designed for children themselves, some banks offer accounts with a passbook or cash card so that children can learn to manage their money directly. The Young Saver account from Halifax is a good option. Of course some parents may want to set up a trust fund or Junior Isa to ensure some money can be saved without potentially being removed by their children.
Better paying accounts
For those seeking the best accounts in terms of benefits, Halifax’s Kids’ Regular Saver is a 12-month account with a fixed interest of 6%. This is specifically for children aged 0-15 and parents can pay anything between £10 and £100 every month by standing order. No withdrawals are allowed and interest is paid on maturity – after the 12 month period.
Ethical banking options
Charity Bank only lends money to charities, social enterprises and community organisations, and it offers an “ethical saving for under 16-s” via its Small Steps account – paying 2% interest. On opening the account you can choose the amount you want to pay in and how long you want to keep it for. Fixed periods range from one, to three or five years. At the end of the period, the money can be paid to the young saver or reinvested into another Small Steps account.