Thinking about savings for your children?

The rising costs of living and education make saving for children one of the most rewarding decisions. Saving as soon as possible for your children might alleviate future stress. Furthermore, it is a good idea to create a habit and encourage children from an early age to save either as one large deposit or regular smaller ones. There are more than 150 products available in the market for you to choose the one that suits you best. As with adult savings accounts, there are different types available (easy access,  notice, bonds/term).
There are several banks and building societies that offer attractive accounts for children. However, as attractive as the freebies might be, the main choice should always rest on the interest rate and conditions. Most children’s accounts offer instant access and wont charge you for withdrawing without previous notice. There are also notice accounts available which usually offer higher interest rates. Bond accounts offering the highest rates often demand a minimum saving period.
National Savings offers also children’s bonus bonds, available only to youngsters under 16. These bonds pay a fixed rate of interest and can be held until the child becomes 21. The bonds qualify for a bonus when held for more than five years. A child can have up to ₤3,000 worth in bonds free of tax.
After a child’s account expires the funds can be transferred to an adult’s account. Parents are allowed to open children accounts until the child is between seven and eleven. If you are planning to put aside a lump sum for several years, financial advisers agree that the best option is to invest in the stock market. Volatility wont be a huge issue in the long run. When invested in stocks, the value of the money usually outstrips inflation over time.