We all want to leave a little something for our children. Securing their future, perhaps for when we’re not here, can be a great thing to do. But how exactly can you go about investing for children? What is your child saving plan? Especially right now when we’re facing tumbling interest rates and our finances might seem a little less secure.
Regular Saver
Right now you can open up a Kids Monthly Saver with Halifax and get 4% interest on those savings. The 4% is fixed for a year and won’t change during the term. You can open it online or in branch and you can put away up to £100 a month. It’s worth noting that the account doesn’t allow withdrawals in order to get that 4% interest rate. Max out the account at £100 a month, meaning 1200 in the year to get the maximum amount of interest. As so many rates have dropped, you can put your children’s money to work in this account and get a decent amount back at the end of the first year. After that it will drop to 1.45% for balances up to £5000. Anything over that will only be 0.01%.
Easy Access
If you’d like to be able to access the money that you’re investing for children, you need an account which will allow withdrawals. There are a couple of options here depending on how much you want to put into the account. To get 3%, Santander 123 Mini is your best option for balances between £1500-£2000. HSBC’s Savings offers 2.5% on balances between £10-£3,000. Finally, for big amounts, Virgin Money’s Young Saver gives 1.75% on balances between £1-£25,000. Maxing this Virgin account would give over £400 in interest a year!
Other Options
You might consider Junior ISAs where you can get up to 2.95% in interest. These rates could drop at any point so it’s best to have your finger on the pulse and be ready to move money around to get those best interest rates. even though the chances of winning are dropping, Premium Bonds can be a great way to save for kids as they can win money every month. If you’re thinking long term, you can start a pension for your child too!
Investing for children can be tricky. We want the best for our kids and we need to make the money we put aside for them, work to give them the best possible future.
