Can You Afford to Commit to a Child’s Savings Plan?
Looking after your children’s future is vitally important and when it comes to giving them a hand financially, then you have to consider setting up some sort of savings plan for them. The earlier you start to do this the better and with the help of government schemes like the new Junior Isas which have just replaced CFTs, you can do this as your baby is born. Theses Junior Isas will give you a ‘kick-start’ to setting up savings plan and you do have the choice of choosing a savings provider, as long as they are approved.
Of course setting up some child’s savings plans may mean paying a minimum amount of money into their accounts every month. Looking at which provider offers the best rates of interest is one task that needs to be looked into seriously. Checking out the small print as well as how the accounts needs to be managed is another. What are the penalties of closing an account? What are they if you cannot pay the contributions due to circumstance change?
What do You Need to Consider Before Opening a Savings Account?
All these factors need to be taken into consideration before opening any savings accounts. If you think that at any point in the future, you may not be able to keep up the minimum savings contributions, then you have to think about opening an account that will permit you to miss some occasionally. In this instance it might be better to go to a high street provider and open up a regular children’s savings account, but remember the rates of interest you receive may not be as good as other providers offer. The rule of thumb is to do a little research first and find a provider that will pay fair rates and give you easy access to your money. Make sure they do not have a notice period or penalties for withdrawals as well. If you can avoid switching accounts to get the best deals then this will save you a lot of hassles later on too.
Making Minimum Payments into the Account
You have to try to make a minimum payment into any account you open for your children so this is one of the important questions you need to ask yourself when you first consider opening a savings account for them. There is no point committing to a rigidly run savings account if at any point in time you may not be able to afford the monthly contribution. With this said it is hard to predict the future and anybody may suddenly find themselves in a situation where they are unable to pay into the savings fund. Therefore choosing a more flexible savings account might just be the best route to take.
On thing to remember is that no matter how attractive the offers of gifts a provider might be promoting, the bottom line is whether or not they are giving you a fair interest rate and whether or not the savings account you are considering opening is as flexible as you need it to be.