When I was a child visiting the bank with my granny was a regular ritual. All my elderly relatives would save their £1 coins every week in a jar, then once a month or so we would go to the bank to put the money into my savings account. My favourite part was handing the bank cashier my savings book, standing on my tiptoes to reach the counter, and watching her process the deposit.
So when I had my own children it seemed the natural thing to do would be to open savings accounts for them. Not being particularly banking savvy I spend a lot of time researching different types of children’s savings accounts.
To save you time, and make that process easier for you, I give you the lowdown on children’s saving accounts.
1.Easy access children’s accounts- These accounts are convenient, you can deposit and withdraw money whenever you want to. However they usually also offer the lowest interest rates, so are probably not the best choice for serious long term saving. These accounts are good for pocket money saving and teaching children about banking.
2.Notice children’s account- These accounts mean you have to give warning before making a withdrawal, usually between one and three months depending on the account. This type of account will usually offer higher interest than an easy access account.
3.Term children’s account- These accounts tie up your children’s savings for a fixed time, usually one, two or three years. They offer higher interest than either of the previous accounts so are good if you are saving for your children’s long term future.
4. Junior ISA – These account were initiated by the government when it was decided to drop the child trust fund. So your child can have a cash ISA for children if they are not eligable for the trust fund (born before 2002 or after Jan 1st 2011). They are a tax free, high interest savings account for under 18’s in which up to £3,600 a year can be invested.
I think it is a great idea to open some kind of savings account for your children. Even if it’s only going to be for saving small amounts of money in it is a great way to teach your children about saving money.