Savings account for children – save long-term and safely
More and more parents and also grandparents are starting to do so, for their children or grandchildren a savings account shortly after birth or set up another product that serves to build up assets through regular savings contributions. For example, the opportunity is often used to open a free student account in order to deposit pocket money on it. The banks are now even offering special savings products for children that can be used for different purposes. It is therefore important for parents, for example, to make a savings account comparison so that a safe and yet profitable product can be found. In addition, there are some points to consider when opening a savings account.
1. The most important details of the savings account for children at a glance
- Savings account must be opened by parents
- Old-age insurance and savings account in combination
- Carry out savings account comparison
- Open a savings account online or at a branch
- Call money account as an alternative
- Advantages of child savings accounts
2. Savings account for children: different variants are offered
In earlier times, it was usually the case that parents and grandparents decided to set up a Normal savings account have decided if money should be regularly collected for the children. The market has been developing for some time now that more and more banks are not only offering a normal savings book, but very special products that are aimed exclusively at minors. So it is children account less and less for a savings account with three months’ notice, but for example one Premium savings plan or a savings account with special interest. For this reason, it is important that parents have a detailed Comparison of offers because, of course, the selected bank product should be secure on the one hand and on the other hand also securitize the best possible return.
Savings account for children is worthwhile
The savings account for children is now offered in different versions. More and more banks are starting to offer special savings products for minors.
3. Baby savings account: Set up immediately after birth
More and more parents and grandparents want shortly after the birth to start paying regular savings contributions for the child. Therefore, it is the so-called Savings account for the baby a savings product that some banks already offer. An advantage of these savings accounts is, of course, that there is a very long savings phase due to regular deposits. If, for example, the parents pay only 20 euros a month to the savings account for the baby over a period of 18 years, this would – depending on the interest rate – result in an impressive sum of over 8,000 euros if the child later becomes an adult.
However, you should make sure that the savings account for the baby and, of course, the savings account for children in general can fulfill some important features, such as:
- high security
- the best possible return
- Bonus or bonus for savings contracts
- low cost
Savings account for the baby for early savings
The savings account for babies is now offered by some banks and, above all, means that savings can be started shortly after birth. However, this savings account in particular should be able to meet certain conditions so that savings are worthwhile in the long term.
4. Savings account comparison: what parents should pay attention to
As already mentioned, it is definitely recommended to carry out a savings account comparison first because of the numerous offers. If you have never made such a comparison and therefore do not know what you should pay attention to in detail, we would like to provide you with assistance in this context. In the first place, of course, it is the estimated conditions that are of great importance when comparing savings accounts. These primarily include:
- interest rate
- fixed or variable interest
- additional bonuses or bonuses
- any fees
- available options
- Special deposits possible
In the list you will find the most important conditions that you should consider when comparing savings accounts before you set up a savings account for children. Of course, interest is of primary importance here, but you should also not neglect security and any fees. You can easily carry out the comparison yourself online today, for example by comparing numerous offers with each other with regard to various conditions.
The savings account comparison is highly recommended if you as parents want to find the best possible savings product for your child. The comparison result should also be able to answer whether this is a savings book or another form of savings.
5. Open a savings account: only a few steps are necessary
Have you basically decided to set up a savings account for your child or children? In this case, you only have to take a few steps to open the savings account. The way differs, however, depending on whether you open the account online or opt for the traditional variant, so that you apply for an account in a bank office.
In a direct comparison, opening an account online can often be characterized by some of the following advantages:
- often better interest rates or conditions
- Opening the account regardless of bank opening times
- previous online comparison possible
- relatively small amount of time
Regardless of whether you choose to open an account online or at the office, the first step is always to choose a product and apply to the bank to open an account. In the course of opening this account, you have to provide a lot of information, both about your child and yourself as a legal guardian.
Only a few steps until the first deposit into the savings account
The further steps then look as follows:
- Sign the account opening application
- for online account opening: send to the bank using the Postident procedure
- Set up a standing order for monthly payments or alternatively arrange direct debit
- Check your account balance every now and then
As can be seen, opening a savings account as a youth account usually takes very little time. In addition, the effort is relatively low, so opening a simple savings contract or savings account will rarely take more than 15 minutes.
Opening a savings account for children is relatively easy and quick these days. It is important to note that both parents and children must legitimize themselves, for example by presenting a birth certificate or a children’s ID.
6. Old-age insurance and savings account: a common use
Parents are increasingly opting to set up a savings account for their children so that they can already contribute a small part to later private retirement provision. On the other hand, there is still the so-called ZielSparen, which has the background in particular that the child has a certain amount of money available for his 18th birthday, for example. This purpose saving is still carried out today by numerous parents and grandparents, with the following possible uses in particular if the child has turned 18, for example:
- Pay driver’s license
- Fund your studies or training
- buy first car
- finance the first home furnishings
In addition to these uses, more and more parents are also taking the opportunity, Combine old-age insurance and savings account. In this case, a very long-term contract is usually chosen, which the child should not necessarily terminate when the child reaches the age of majority. In this case, the primary goal is to achieve a very good additional private pension by saving as long as possible, in the best case from the birth of the child to retirement age. However, whether the child has the discipline at the latest when they reach the age of majority not to dispose of the existing capital but to continue to save it is usually not in the power of the parents. By law, it is regulated in such a way that all savings and other assets that are in the name of the child may only be used and claimed by the child themselves when they reach the age of majority.
Combining old-age insurance and a savings account is used by quite a few parents. However, there are of course numerous other uses for which a savings account can be used when the child reaches the age of majority, for example to finance the driving license.
7. The daily allowance as a child’s account compared to the savings account
Savings books and savings accounts have suffered in recent years to the extent that they have gained the reputation of not being worthwhile investments and savings. This is certainly due to the fact that general capital market interest rates have been in the basement for several years. For example, normal savings accounts often don’t even pay an interest rate of 0.5 percent, while some banks have even completely abolished the credit interest for a simple savings account.
Of course, parents who open a savings account for children should not be satisfied with such an interest rate. Therefore, depending on the offer and bank, it can be an alternative to opt for one instead Savings account to decide. The call money account as a child account has its advantages compared to a savings account, whereby the individual offers must always be considered here.
The call money account can also serve as a savings certificate
The possible advantages can include the following features, for example:
- availability of credit at any time
- no notice periods
- often higher interest than a savings account
- can be used as a one-time investment and for regular savings
Most customers with the overnight deposit account certainly think above all of investing an already existing larger amount of money. However, it is alternatively possible at almost all banks, to use a call money account for regular savings. The reason is that there is usually no minimum deposit, so that, for example, 100 or 200 euros can be transferred to the overnight deposit account regularly. If, for example, there is still a monthly or quarterly interest payment, you can even benefit from compound interest. In particular, if a certain flexibility and availability at all times is to be guaranteed without prior notice, the call money account as a child account is a real alternative and perhaps even a better solution than the savings account.
The daily allowance as a child account can be a real alternative to a savings account. However, it is important to always check in each individual case which of the two variants is more suitable for the intended use and the savings goals.
8. Targobank offers savings accounts for children
With the so-called Junior Savings Account Targobank is also one of the credit institutions that offers a special children’s savings account for young savers. It is a simple and safe savings product, which is also ideal for learning how to use money, among other things. Deposits can not only be made by bank transfer or other online means, but it is also possible to make cash deposits in one of the numerous branches of Targobank. The only requirement for this savings account for children is that the account holder must not be of legal age. The Targobank also offers a current account for students.
Especially compared to the average interest that savers currently receive in a savings account, the conditions of the Targobank junior savings account are very attractive. However, it should be noted that there is currently an interest rate scale with regard to the investment amount, which looks as follows:
- 2.0 percent for credit up to EUR 1,000
- 0.5 percent for the part of the balance that is between 1,000 and 5,000 euros
- 0.15 percent for the credit share, which is between 5,000 and 250,000 euros
- 0.05 percent for credit parts above EUR 250,000
Regarding the other conditions of the Targobank junior savings account, it must be said that the notice period is three months and up to EUR 2,000 per month can be used without advance interest even without notice. The minimum deposit for the junior savings account is EUR 0.50, while there is no maximum limit to be observed.
The Targobank junior savings account
The Targobank junior savings account is ideal for all savers who are not yet of legal age. In particular, balances up to EUR 1,000 are subject to an interest rate of currently two percent.
9. What are the benefits of child savings accounts??
Child savings accounts can sometimes have some advantages, so parents and maybe grandparents should consider carefully whether they can regularly save at least 10 or 20 euros per month. A major advantage is certainly that a relatively long saving period is often chosen. This in turn means that after 18 years, when the child has reached the age of majority, a substantial amount can have accumulated.
There are also some other advantages, some of which apply specifically to the savings account for children. Examples include:
- Special interest rate for underage savers
- free membership in the savings club
- Long-term savings with flexibility
- Disqualification for children up to the age of 18
- mostly savings without risk
The vast majority of child savings accounts come with some advantages, It should also be noted here that the respective offer is of course always important. It is therefore necessary to repeat that a Children’s savings account comparison is absolutely recommendable, whereby parents should also take the trouble not only to examine the interest, but also the other terms and conditions of the respective savings offer.
10. Conclusion: Savings account for children is worthwhile
The advantages of savings accounts for children are, for example, the very high level of security and the possibility of being able to easily accumulate a total amount of 10,000 euros or more by saving for a long time when the child is of legal age. However, they are Benefits in individual cases, of course, depend on the respective product, so a comparison should be done.
passbook Savings account for children – what should be considered? In almost all families it exists in some way: the savings book or savings account for…
Daily allowance account for children – an alternative to a savings book We’ll help you choose the right child benefit account. When it came to saving…
Open a savings account for children? Many people still know the classic one created by parents passbook . Stored at home, the parents took the book and…
Invest money for children: savings book or shares?
Invest money for children: savings book or shares? Parents usually start looking for investment opportunities for their offspring after the birth of…