Securing your children’s future is a priority for all parents. There are many financial products out there that can help you set aside small amounts of money each month that can’t be accessed until they become an adult. There are also current accounts that can teach them how to manage their money, deposit wages and savings into.
To start with you may just want to start setting small amounts aside. ISAs can be set up from when your child is born and you can deposit as little as £1. These accounts are great if you want put something away that neither you nor your child can access until they reach adulthood. National Savings and Investments (NS&I) are a really safe place to start. They are not a bank, just a place to hold savings and bonds and are entirely backed by the Government’s Treasury, which means you cannot lose your money. The Junior ISA on offer is tax free and currently has an above average interest rest of 3.5%. If you were to only deposit £1 per month for 18 years that amount could pay for their driving lessons or a round the world ticket when they leave school!
For that it may be worth looking at opening a current account with a mainstream bank. Some simple accounts are available which children can start managing for themselves from as young as seven, but many of them give more autonomy from 11. These accounts generally have no monthly fees and will not offer your child access to any overdraft or borrowing, this means when the money is gone, it’s gone. Some banks offer different accounts for children and teenagers, where they can pay their pocket money, cheques and any income from jobs directly into their bank account. It’s good to look at what accounts are available.
Some children’s bank accounts are only available if a parent or guardian already has a current account with that bank. So, your own bank is normally a great place to start.
There are other alternatives available too, in place of pocket money – for example, a pre-paid card. These aren’t bank accounts so your children wouldn’t be able to pay in money or savings, but many offer real-time notifications to a mobile phone, so they can track their spending.
The documents you need to set up an account
Like an adult bank account, you’ll probably need two pieces of identification to open a child’s bank account;
Address ID This could be a school letter or a utility bill in a parent’s or guardian’s name if you live at the same address.
Name ID a birth certificate or passport.
Financial literacy is one of the skills we all need and will likely set us up for a more secure future. Giving children the chance to manage small amounts of money without risk or debt from an early age can make a real difference once they get into adulthood.
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