Find out how to get the best return on your child's savings and help them grow a nest egg for the future.
It is important to start saving for your child's future as soon you can - to give you more time to build up a tidy sum ready for when they enter the adult world.
There are a huge variety of children's savings accounts on the market which not only help you maximise the money you put aside for your child, but also aim to encourage your child to develop good saving habits too.
The majority of child savings accounts have no minimum income requirements and offer instant access to saved funds.
Most accounts require a parent or guardian to act as a trustee on the account until the child reaches a specified age, usually between 7 and 10 years, when (providing on consent from the trustee) they are able to operate the account themselves.
Many child accounts will offer a good rate of interest although it is still advisable to check this periodically in case the rate drops over the years. Additionally, to encourage saving, most accounts designed for children offer saving incentives such as books, stickers, moneyboxes or toys which can be earned as the child adds money to the account.
Child Trust Funds
To encourage parents to save for their child's long term future, the government introduced Child Trust Fund accounts.
These are investment based accounts which were opened with an initial £250 deposit provided by the government. Child Trust Fund accounts are designed as a long term investment and funds will only become available to the child when they reach 18.
Child Trust Funds can no longer be opened by new applicants but can still be used by existing account holders to save for your child's future. Up to £3,600 can be added to a Child Trust Fund account by parents, relatives and friends each year the account is open.
For more information on Child Trust Funds read our guide: Child Trust Funds Explained.
Junior ISA
Following the closure of Child Trust Funds to new applicants in January, 2011, the governement unveiled their tax free replacement, the Junior ISA.
Officially launched on 1st November, 2011 the Junior ISA is open every child under 18 who didn't qualify for a Child Trust Fund. This means if your child is still under 18 an born before 1st September, 2002 or after 2nd January, 2011 that you will be able to open a Junior ISA on their behalf.
The Junior ISA is similiar to Child Trust Funds in many areas, you can save up to £3,600 a year tax free and any money you save into the account cannot be withdrawn until your child turns 18.
To find out more about Junior ISAs read our guide: Junior ISA Regulations FAQs.
