Best children’s saving accounts for maximum benefits
If a parent ventures out in to the world of finance he is ought to find a number of savings accounts that will suit his need to start saving for his child from an early age. If planned properly a children saving account can earn up to six percent of AER for a year.
The need therefore arises to have a look in to the different saving options available for children.
- Regular savings account- These saving accounts make it mandatory to deposit a minimum amount of money in the children’s account every month. This attracts higher rates of interests on the account and therefore growth in the net yield. The draw back of regular savings account is that if a monthly deposit gets missed or money is withdrawn from the account then the rates will become lower. Most of the other rules and regulations are same as the adult regular savings account.
- Fixed rate savings account- These savings accounts are different from the regular saving accounts in the fact that the rates here remain fixed and do not fluctuate. These saving accounts guarantee fixed rate for a predetermined period so that the investor knows the amount of money that he will get at the end of the date of maturity. The only drawback for these savings accounts are that they are time locked and the investor will not be able to withdraw money before the date of maturity. This however works in favour of children’s savings plan as this helps in forceful saving of money. The other drawback of fixed savings account is that the fund is not allowed to grow further if the market rates increase as the interest rates in this type of savings account remains fixed.
- Easy Access saving accounts- Almost like checking account, these saving accounts allow easy access to money. The rates are variable and therefore a parent can always be on the look out for the rates to fluctuate and transact money accordingly. These accounts are opened in the child’s name but are accessible only to the parent till the child becomes sixteen years old.
Children saving accounts are a good source of stacking out money for their future education. These accounts do not attract taxes and this opportunity can be taken by parents to save for the future. The child also can be taught to manage his finances and get a feel of the values of saving.