Saving - Who will pick the apple for the thirst?
Admittedly, it is a cute image. There is your child, with a hammer in one hand, and a fallen piggy bank in the other. Or, if it is more modern, with a freshly opened plastic piggy bank. Not to mention the proud smile on his face, seeing the self-saved booty. Enough to shop at the local supermarket. But for those who want more, there is a choice. Much choice…
Nowadays you can not enter a bank with your child, or an employee will step up to you ...: "does the child already have a savings account ...?"
Of course it is a nice idea for parents to give your child some extras for later. For example for an expensive study, driving lessons, a scooter. But also savings targets that are less far away are most easily reached when you open a savings account for your child. But that sounds easier than said, because the range of different savings products is very large, and differentiating between all those different accounts is not as easy as it seems.
To give you a bit of an idea of the possibilities and different forms of savings that can be opened for your child in the Netherlands, we list the most important products for you.
In the past, the Netherlands helped out a little ...
From 1958 to 1992 there was an arrangement by the Dutch government to encourage saving by and for children. This so-called "Zilvervloot" bill, named after the barges that sailed on merchant ships in the sixteenth and seventeenth centuries, was particularly popular. The idea was simple: you saved an amount during your childhood and at the end of the term, just before you turned eighteen, you got an attractive bonus from the Dutch government on top of your saved money.
Unfortunately, this arrangement is no longer available today, but nowadays a Silver Fleet account is offered, and now by the DSB Bank. In general terms, this arrangement looks a bit like its famous predecessor; the interest you receive on your saved money is attractive, and at the end of the term you receive a ten percent bonus on the saved amount.
Incidentally, it is not only DSB Bank that offers bonus interest on the accumulated credit. Several other banks offer this option, and it is certainly worthwhile to open an account for you, first to check whether a bonus is included with the savings account.
Huh? That interest was still higher?
Interest rates on savings accounts sound interesting and are of course the most important selling point of the offering banks. But not every bank calculates the interest offered in the same way. Interest that is offered is almost never fixed: usually it is variable and the bank can always adjust an interest rate. In addition, one bank pays interest every quarter, while the other one pays some extras on your account once a year. It is therefore advisable not only to opt out of the highest interest rates, but also to ask yourself how exactly this interest is paid and whether it is guaranteed or not. But no matter how variable an interest rate is, it always yields more than if you keep your money in the old-fashioned piggy bank at home.
Periodically and automatically
Saving for your child is fun and useful, almost every parent agrees with that. But it certainly takes some discipline to actually set aside money for your child every month. Fortunately, it has become very easy nowadays, for example via internet banking, to have a fixed amount transferred every month, every quarter or every year to your child's savings account. With such a regular transfer you prevent that you sometimes forget to save a month for the child, or that your money is already spent before you have arrived at feed books. If you save a fixed amount per month, that also has the great advantage that the savings balance of your child, almost unnoticed, rises to a big apple for thirst. How about the regular saving of child benefit? Because it saves as much as you save automatically, some banks like to give away a little extra when you open the account. These are usually fun gadgets for your child, such as a hug, a book, or for example free cinema tickets. Because these offers vary a lot, it is also wise here to first look around what the different banks offer.
Save and pay
Many parents open a savings account at the birth of their child for the little one, on which it is saved, automatically or not. But when your child gets a bit bigger and learns to see the value of money a bit, a savings account is certainly no longer sufficient. This way your child, when it gets older, can never only withdraw money from his account, but you will always have to be there as a parent. Some forms of savings do not allow interim money to be withdrawn from the account or, for example, only after the balance has been fixed on the account for a quarter.
That is why it is useful to inform you about the different payment accounts for children by the time your child is about 6 years old. These accounts can in principle be the same as a normal payment account, although of course there are conditions attached to how much is spent. It would not be nice if your child immediately learns to stand red, and of course these child accounts do not offer any possibility!
Admission of the saved credit can not be done via an ATM, you will really have to go to the bank. Sometimes it is also possible to deposit your savings balance via your internet bank account, telephone or credit card (so-called contra account), after which you can simply spend the money again.
To open a savings account you always need valid identification, for example your ID card or a valid passport.
As a parent, you can always open an account for your child. Grandparents who want to put a "passbook" in the name of their grandchild by surprise should be alert to the fact that the parents always have to sign with the opening of an account. That is of course a nice feeling, because you always know which accounts are opened in the name of your child.
Withdrawal of balance is usually possible for parents, unless of course an account has been opened of which the balance is fixed. Until the age of eighteen, parents have access to the saved balance, then the savings account automatically transfers to the child, and will be converted into a suitable adult savings form.
Do you want to know more about saving for your child? Then take a look at the following links, or visit the various banks in the neighborhood. There, all the information, per product, is ready for you in clear leaflets. Of course you can also choose to hold an advisory meeting with the bank of your choice.