Selecting a Children’s Savings Account

 

Setting up a savings account for your child from an early age can be a great way to invest in their future. With the cost of university rising and the economy under pressure, every family could use a safety net, no matter how many years in the future you’re planning. Follow a few simple steps to ensure the best choices are made when setting up your child’s savings account.

Keep the interest tax-free. As long as the interest added onto amount paid into the account doesn’t exceed the annual income allowance, your child’s savings account should stay tax-free. This won’t happen automatically though; fill out a R85 form to submit to the bank when opening the account to ensure that no tax will be charged.

Check that they’re eligible. Certain savings accounts have age limits, so ensure that your child is within the age range for that particular bank’s account and exclude ones that don’t apply from your comparison searches.

Fixed rate bond or instant access savings account? The first is best for lump sums paid in, as it then locks the account for a fixed period and pays good savings rates. A regular savings account allows you to save up and deposit money on a more regular basis, and an instant access account allows you to withdraw money on short notice. As a replacement for the now unavailable Child Trust Fund, Junior ISA accounts are also now available at many banks. Consider which is best for your family, and then compare rates across banks.

Do some comparisons. There are plenty of quick and easy bank comparison websites available online; utilise these to compare the rates currently out there to be sure that you’re getting the most out of your money and the best for your child.

Review Frequently. Try and remember to review your child savings account annually to avoid missing out on better offers from other banks.

 

 

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