Finding the right savings account for your baby

Saving money for a baby's future is not just a nice thing to do for them - it is often necessary to help support their dreams later in life.

As a parent, you have plenty of costs to worry about each week, so coming up with a lump sum of cash on relatively short notice can be nigh on impossible. Even if you just want to help your child attend a better school, learn to drive or plan a wedding, sometimes it is just not possible.

This is why many parents - and grandparents - choose to regularly put aside small amounts of money over a longer period of time, so that when their children or grandchildren know what they want to do in life, they have the finances available to help them.

Having the money to help your kids with expenditures like university fees, a first car or a deposit on a house, is sure to make the process much easier. There are alternatives available if you don’t have the funds to help, for example either you or your child could take out a loan, but this could result in you paying a lot in interest on the money you have borrowed.

Outline your budget

It is up to you how much you want to put aside each month - sometimes it helps to have an overall figure in mind in terms of how much you would like to save for your child or maybe how much you can realistically afford to save now. If you are uncertain, it is probably worth discussing options with informed family members or friends, or finding an Independent Financial Adviser who will be able to provide information on the options available to you, however they may charge a fee for their advice. 

Either way, be honest with yourself about how much you can afford now and how this is likely to change in the long term. No-one knows for sure what will happen to them in the future, but you can often make an educated guess regarding your finances.

Choose a product

There are a range of products available to suit different people; you will need to think about how you feel about risk, the type of investment you are happy for your money to be paid in to and a number of other factors like how long you would like to save for.

You should be clear in your head about what is important to you about the service you will receive from the product provider, including how accessible your funds are and how returns are being generated. For example, some arrangements offer attractive rates because of tax-free allowances.

Choose a provider

It can be difficult to choose a provider once you have a savings plan in mind, as many will offer the same deal but with a different name. Make sure you look at all the options available to you and not just the ones advertised heavily in the media.

Also, do not underestimate how important customer service is when setting up a long-term savings product - you are likely to be with this company for many years, so make sure you are happy with the way they do business. With a combination of a good financial return and efficient customer service, your relationship with them could be made much easier.

Connor Milliard has been helping people to achieve their financial goals from more than 12 years. To know further information on long-term-savings visit http://www.forestersfriendlysociety.co.uk/

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