Image courtesy of JD Hancock

Children can get quite a bit of money these days. Whether it is gifts from generous relatives, parents or pocket money it can add up. Some children ill just spend all of the money that they get, but some parents like to encourage their children to save their money or some children are not keen to spend it. If they just keep it in their money boxes or wallets, then it will not be earning any interest. It makes sense for them to have an account to pay it into so that they can start to get interest on it. Although this will not be lots, it is better than leaving it in a money box. Having an account may also encourage your child to save and will also teach them about how to use bank accounts, which is something they will need to understand as they get older.

It can be difficult knowing exactly what type of account to get for them though and which financial institution to go with. There are many and they tend to have quite attractive rates for children. You need to decide whether you want a child trust fund or premium bonds where they will not be able to withdraw money until they are adults or an account where they can draw money out without giving notice or perhaps more than one account. It will depend of course on how much money your child has and is likely to pay in over their childhood.

It is worth comparing what is on offer and thinking about what sort would be most suitable for them. If your child is old enough they may like to discuss it with you. You may want to speak to a financial advisor or you can just compare using the internet and by going into your local branches. You will have to decide whether you want your child to be able to go into a branch and draw out or pay in money or whether you do not mind it being a postal or Internet account.

You have to decide both between the different banks and building societies as well as the types of accounts. This can take a lot of time and it is worth spending time doing this. You will also find that you can find comparison websites and reviews online, which could help you to make up your mind. You should make sure you understand what the account has to offer and learn about it yourself, but it is handy to find out what others think as well to help you to decide which you think will be the best for your children.

It can be a difficult decision to make and should be one that you take some time over. You will need to think about many different issues, but with some accounts you should be able to switch accounts if you want to. Therefore if you are unsure, make sure that the one that you can open can be switched to a different type of account or closed at any time.