Saving for kid

Ghetofarmulous

Hi all,

Just wondering if anyone can point me direction of the best account to open for a child. I simply want to save money for college/ when they finish school.

Ta

Sheep Shagger

Ghetofarmulous wrote: »

Hi all,

Just wondering if anyone can point me direction of the best account to open for a child. I simply want to save money for college/ when they finish school.

Ta

Most banks offer kids accounts, be warned the interest rate is normally pretty poor.

From an AML ease perspective maybe go with your main bank as they can at least leverage the AML they have on file for you, you'll then just need a birth cert for your child.

If you are a Revolut user already then its even easier, they offer kids accounts you can open straight away.

Pinoy adventure

The post office /state savings have the best return and easy too set up

Ghetofarmulous

Thank you both for this. Perhaps I should open the account in my own name.m and give as inheritance. I plan to save 100 euro per month for foreseeable.

Pinoy adventure

Ghetofarmulous wrote: »

Thank you both for this. Perhaps I should open the account in my own name.m and give as inheritance. I plan to save 100 euro per month for foreseeable.

You have the 6 year monthly state savings plan in the post office with offers a good return.

Jim_Hodge

I'd also go for regular state savings for the best return at present and DIRT free. We did it for our kids and it produced a nice nest egg for them. Anything we invested with Insurance companies lost money over time.

Buddy Bubs

Have a look at savings products from life insurance and pensions companies. I wouldn't put money away every month in a non growth account for 10-20 years. Inflation could ravage the value of it over time. Rainy day fund for bank accounts, invest the rest in something.

RoryMurphyJnr

Credit Union is also a good idea.
You could go down with them (depending on age) each week to save €5 or whatever your budget is.
Gets them into the habit of regularly saving themselves

The J Stands for Jay

Pinoy adventure wrote: »

The post office /state savings have the best return and easy too set up

Be careful here. They will only repay by cheque, and the cheque will be in the names of all the parties on the account.

Jim_Hodge

McGaggs wrote: »

Be careful here. They will only repay by cheque, and the cheque will be in the names of all the parties on the account.

It wasn't rocket science to deposit the cheques and give the kids the money afterwards. The state savings include a ChildCare Plus account option.

brownbinman

Pinoy adventure wrote: »

You have the 6 year monthly state savings plan in the post office with offers a good return.

I didn't know about his one. We've been putting childrens allowance directly into daughters credit union so we never see it

Might be worth changing to state savings as someone else mentioned it's DIRT exempt

The J Stands for Jay

Jim_Hodge wrote: »

It wasn't rocket science to deposit the cheques and give the kids the money afterwards. The state savings include a ChildCare Plus account option.

Just not very tax efficient.

Pinoy adventure

brownbinman wrote: »

I didn't know about his one. We've been putting childrens allowance directly into daughters credit union so we never see it

Might be worth changing to state savings as someone else mentioned it's DIRT exempt

Credit union won't give much interest in comparison too the child benefit state savings cert

Henry Ford III

Pinoy adventure wrote: »

The post office /state savings have the best return and easy too set up

The return will most likely still be less than inflation meaning you'll lose in real terms.

Henry Ford III

Jim_Hodge wrote: »

I'd also go for regular state savings for the best return at present and DIRT free. We did it for our kids and it produced a nice nest egg for them. Anything we invested with Insurance companies lost money over time.

Risk assets, particularly equities, have always outperformed cash over time.

You were either poorly advised or your timing was too short term.

Jim_Hodge

Henry Ford III wrote: »

Risk assets, particularly equities, have always outperformed cash over time.

You were either poorly advised or your timing was too short term.

I've been investing for 40 years and while some equities did well many failed to deliver. If bad timing is that the value has dropped just when you need the funds then it may have been bad timing. It certainly could never have been considered short term though. Over time is very subjective, as the value is what it it at a particular moment in time.

If the OP wants long term but guaranteed return which is a means of keeping funds for a child's future use then a safe, tax free option may be best for them. Even small compound interest rates have an impact over time.

Henry Ford III

Jim_Hodge wrote: »

I've been investing for 40 years and while some equities did well many failed to deliver. If bad timing is that the value has dropped just when you need the funds then it may have been bad timing. It certainly could never have been considered short term though. Over time is very subjective, as the value is what it it at a particular moment in time.

If the OP wants long term but guaranteed return which is a means of keeping funds for a child's future use then a safe, tax free option may be best for them. Even small compound interest rates have an impact over time.

That's why diversification is vital. Punting on individual stocks can be quite risky I'd agree.

A guaranteed return which won't keep pace with inflation is a guaranteed loss in real terms.

Having said all that keeping 3 months net salary in cash is not a bad idea to cover an emergency.

Jim_Hodge

Henry Ford III wrote: »

That's why diversification is vital. Punting on individual stocks can be quite risky I'd agree.

A guaranteed return which won't keep pace with inflation is a guaranteed loss in real terms.

Having said all that keeping 3 months net salary in cash is not a bad idea to cover an emergency.

Let's keep some perspective. It's a parent wanting to put a monthly amount to one side for their child. This is saving not investing.

The J Stands for Jay

Jim_Hodge wrote: »

Let's keep some perspective. It's a parent wanting to put a monthly amount to one side for their child. This is saving not investing.

Putting money aside for a kid would likely have a timeframe of around 18 years. By not investing, the value of the money is reducing all the time. A decision to put the savings in a bank account is still an investment decision, although it is unlikely to be the best decision in these circumstances.

Where would people recommend to invest children's allowance? Wife has an AVC with Zurich so called them about their Child's Savings Plus offer, but the adviser said not to use it because its in the child's name and he'd recommend investing in our own name so that we can decide how and when to use the money in the future.

Thanks

TheMilkyPirate

McGaggs wrote: »

Putting money aside for a kid would likely have a timeframe of around 18 years. By not investing, the value of the money is reducing all the time. A decision to put the savings in a bank account is still an investment decision, although it is unlikely to be the best decision in these circumstances.

What would be the best option? I've an 11 year old who I'd like to start putting some money away for for when he's older (first car/college/help with deposit)

Henry Ford III

Jim_Hodge wrote: »

Let's keep some perspective. It's a parent wanting to put a monthly amount to one side for their child. This is saving not investing.

To you it might be. To me it wouldn't.

There's no reason to prevent anyone putting relatively small monthly amounts into a unit linked life assurance plan.

Costs are reasonable and you can access a massive range of funds.

I did a load of these for SSIA clients a few years ago, and all of them outperformed cash - and interest rates were higher then too.