Child Savings and Investment

Are you investing for your child?

Having children is not cheap by any means these days, especially when you consider the long term basis. The older your children get, the more they will end up costing you, especially when you consider education costs which are rising with every passing year. It may seem easy to put saving and investing for your child’s future off, since higher education is so far away when your kids are young, but it is absolutely vital that you start saving now if you want to make sure that your children have everything they need in life, even far into the future. Surveys are luckily beginning to suggest that as a whole, we are beginning to realize how important it is to save ahead of time for the future. Saving and investing for the future of your children is a necessary parental responsibility. Here is some basic information on how to save for your children, and a look at some of the available financial products that may help you with this process.

* Bank Accounts –

The first step that many parents take toward saving for the futures of their children is to open a savings account on the behalf of each child, making small cash deposits over time. Most banks have accounts that are designed specifically to tailor to children, often offering a higher interest rate and other incentives like savings club memberships for kids, piggy banks, badges and other toys. Even if you are not sure how often you will be able to make deposits, it is still a good idea to set a deposit account up as soon as possible so that it is there any time you want to put money aside. It is surprising how quickly this money can add up if you are diligent about depositing it.

* Tax –

Children are subject to income taxes on their bank accounts just as adults are. They do receive a tax allowance, and they will not be taxed on the interest as long as their total income does not exceed this allowance over the span of the financial year. This only applies to savings accrued by relative or friend gifts so the money that you deposit will be naturally subject to the tax amount.

* Trust Funds for Children –

Trust funds are a unique way for parents to invest money into their children’s futures, creating a fund that belongs to the child but only after they reach a certain age. Most trusts last until the child turns 18, meaning as soon as they reach adulthood they will have access to a savings fund of money that will help them with purchases like buying a car, going to school and so on. Money can be invested into these funds every year, and you can choose between savings funds, shares funds and stakeholder funds depending on your needs and the needs of your family.

There are lots of other possibilities when it comes to savings methods for your children, including bonds, savings accounts, trust funds, investments, shares and stocks. Some are not designed specifically for children, but all can benefit the child as long as you are willing to manage them on the behalf of your children until they are old enough to handle the management their own selves.

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