Visit the main creditmarket.co.uk page for a choice of: Childrens Bank Accounts & Savings Accounts

Open a savings account for your children and give them the benefits of a financial head start.

As their parent, or the person who has parental responsibility the children, you will teach them the value of saving; ensuring that they will have funds for future expenses and their education.

You can begin by depositing one pound for your children’s saving account, as many providers offer this amount as the minimum initial deposit.

However, if your children were born after 1st September 2002, then they are eligible for the Child Trust Fund (CTF), an investment and savings account initiated by the government to enable children to start their adulthood with a personal financial asset.

According to the terms of the CTF, the child receives a £250 voucher from the Government. And if your family qualifies for full Child Tax Credit or is under Local Authority care, this amount could rise to £500.00.

In addition, the child will receive a further £250 when they become seven years of age. There are three kinds of CTF accounts: stakeholder CTF account, accounts that are invested in shares, and savings accounts.

However, all these accounts are made under the child’s name and managed by the parent or the person who has parental responsibility. The child can manage their CTF account when they reach 16 years old. However, they cannot touch the funds until after they turn 18 years old.

Consider opening a savings account when you receive this voucher from the Government. With a savings account, any money you invest for your child is secure.

Opening a savings account for your child is still a good idea, even if they do not qualify for the CTF voucher.

There are more than 70 providers offering children’s savings accounts. You should carefully shop and consider which provider can offer the best savings plan for your child.

It is therefore a good idea to look at what the different providers’ offer, before you choose a plan for your child. To help you decide, think about the following:

Your Attitude towards Expected Return and Risks
When you save the money, how much you save, and your rate of withdrawals, all these affects the interest you will be paid for your child’s account.

In addition, savings accounts do not perform well compared to accounts where the money is invested in shares of companies. You will also need to consider the effects of inflation. With the rising costs each year, your pound is worth much less, than it was a year ago. However, with a savings account, there are less chances of your child losing money.

Many banks and building societies offer high rates, to encourage future business, and because they know, there are fewer withdrawals made from children’s accounts.

Only consider a savings account that buys shares in companies if you are willing to take risks.

How often is interest paid?
Depends on the provider you choose and the savings plan they offer. The interest can be paid on a quarterly, six monthly or annual basis.

Accessibility
What is your preference? Providers offer savings accounts, with instant or restricted access, where you are penalized for frequent withdrawals.

Bank Charges
Providers charge your child’s savings account the cost of running it. You may have invested a modest amount, but ensure that you will not be charged excessively.

Look beyond the incentives
Many providers offer bonus gifts when you open a children’s savings account. But what use are these gifts if the interest rate is mediocre?

And remember – the earlier you open a savings account for your children, the sooner their account will earn money