There are a range of savings accounts specifically aimed at children, either for parents to deposit into or for the kids themselves to manage. Banks have a selection of accounts for various age ranges that give the child more control as they get older. Long term investments are another option, especially if there is the goal of going to university or help with buying their first home. Including your children in arranging savings and investments at a young age plants the seed in their mind that planning for the future is a must in life.
Getting your children involved in saving
Choose an age appropriate way to explain to your child why we need to save money and let them get involved as much as possible. Letting them decide what to do with their pocket money or cash gifts and explaining what the benefits of saving some of it are gives them the power of decision making and they can see the gains in just a short space of time. Some banks have fun characters to make saving more appealing to young children. Younger kids can understand that saving for a few weeks can buy them a bigger toy and older kids can imagine driving their very own car thanks to their savings.
Make the most of ISAs
There are ISAs available just for kids, which give you the added benefit of tax-free saving. It’s worth comparing interest rates and terms as it’s possible to find some very good deals. Various withdrawal options can give access as needed, upon closure of the account or only when the child turns 18 years old. Whether you have a lump sum to invest or plan on saving regularly there are plenty of different savings accounts available. Kids will enjoy seeing their interest adding up, you can help them calculate how much interest they will earn if they put their birthday money into their ISA versus spending it straight away. Help to start them on the journey to a positive financial future.