A savings account for your baby opening has many advantages. So you always have money behind you to pay expenses for school, study or driving license. But also to give your child the best start to realize his dreams. Because let's be honest: children are not cheap and as they get older you will incur more costs. Do you want to save for your baby? Read more about the advantages, possibilities and important points you need to pay attention to here.
Whether or not to open a savings account for your baby?
The choice of whether or not to open a savings account for your baby is entirely up to you. One of the advantages of opening a savings account for your child on time is that you can save a large amount of money unnoticed if your child is 18 years old. You can use this savings for large expenses such as a driving license, school and study, but also for smaller expenses such as a school trip. You always have extra money if you need it.
You should not underestimate these costs. In the first 12 years your child can already cost 50,000 euros! And then your child does not even study. According to NIBUD, the college costs in 2018/2019 are around € 2,060 per year. The books etc. are not included here yet.
You can also decide not to open a savings account for your baby, because for example you do not have to worry about the future costs of your child. Perhaps you are in the luxury position that saving is not necessary and you always have the opportunity to absorb large expenses. But what about when the breadwinner dies? Is there still enough money to pay for your child's study costs?
On the other hand, it also happens that parents simply can not afford to save money. You simply can not do anything about this.
Automatically save child
Children cost a lot of money anyway and the older they get, the more expensive it becomes. Then it can be wise if you start to put aside some money in time. The advantage of opening a savings account for your baby is that you can, for example, automatically deposit a small amount every month.
If you start early with this, the savings account may have grown considerably by the time your child is older. You also receive annual interest on the amount. Okay, the interest is only 0.5% at the moment, but all the bits help anyway? At times when you are tight, you can also temporarily stop depositing.
By increasing your investment a little bit every year, for example with inflation, you save a considerable amount after 18 years.
Save or invest for child?
Do you think that saving for your child yields too little with a savings account and do you want a higher return? Then also think about opening an investment account with a bank. Investing brings more risk but often has a higher return than saving. If you start investing for your child early and you only need the money in 18 years, investing will yield more than saving.
How much you want to invest is of course very personal. Can you miss € 50 per month? Then start as soon as your baby is born with automatic investment. Choose a stable investment fund (for example, BNP Obam or Skagen Global or another fund) that invests globally in shares of large well-known companies.
For example, automatically enter € 50 every month and correct the amount each year for inflation. Seen that you notice that you have saved a nice amount for your child's study.
Calculation example: € 50 per month with a 6% return means that if your child turns 18 an amount of over € 19,000! Calculate it yourself here.
You can open an investment account with your own bank or open an account with Binck bank.
Flexible money saving for your child with an investment account?
Best children's bill
There is not one savings account the best because it is very dependent on your own wishes and how you want to tackle it. It is useful to compare the savings rates of different banks. Often the interest is the highest in savings accounts where you can not withdraw money for the eighteenth year of your child. You can only deposit monthly.
So the money is fixed and you can not get there. In this case you put the savings account in the name of your child. If your child turns 18, the savings will only be released. This has the advantage that you can not access it and use the savings for other purposes.
You can also open a savings account for your baby on your own name. This way the savings account stays in your management. What is useful is that you can save in this way for all costs related to your child and for example have another savings account for other costs such as moving, refurbishing or a new car.
Tips for opening a baby savings account
If you are going to open or compare a savings account, you can pay attention to the following points:
- See if you can take an interim or not.
- If you want to take an interim account, check if there are any costs involved.
- Can the monthly savings amount be adjusted or not. This is especially useful if you suspect that sometimes you can save less.
- Compare interest rates.
- Always check the conditions carefully. For example, when your child can join the savings account (for example, only when he / she is 18 years old), how variable the interest is (or is) and if there are any nice extras.
Savings account baby Rabobank
Opening a savings account for your baby at a large bank such as Rabobank, ABN-AMRO and SNS is often very easy. Especially if you are already a customer at the bank. In that case you can open the savings account online and everything is arranged.The disadvantage of saving with large banks is that the interest rate is not very high. The advantage of a children's account with large banks is that they often offer nice extras for your child.
Banks with high savings rates include ASN Bank and Triodos Bank. You may only have the money when your child is 18 years old. In between you can not collect anything from the account.