Various banks and building societies offer young people accounts specifically to get them into the habit of “putting money away for a rainy day”. Savings accounts have recently experienced a boost in interest rates thanks to recent decisions by the Bank of England. In light of this, experts are urging families to take advantage of these rate hikes to incentivize young people into saving money.
The UK is experiencing an inflation rate of 9.9 percent which is severely diminishing the returns on savings accounts.
In response, the Bank of England has raised the nation’s base to 2.25 percent, with banks and building societies passing on some increases to savers.
Savings accounts for children and teenagers have also been able to benefit from this fiscal decision.
With the cost of living crisis likely to continue for the foreseeable future, parents are looking for the best accounts for their children.
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Speaking exclusively to Express.co.uk, money expert Eleanor Williams from moneyfacts.co.uk shared what families could be doing to better support their children’s savings.
Ms Williams explained: “As rates in the savings arena have recently been rising it’s important that parents take time to check not just their own savings accounts, but also those for their children.
“Helping children to learn about saving and encouraging them to get into the habit of putting money away for a rainy day is a great idea.
“There are plenty of children’s savings accounts available in the market, with a few paying three percent gross or more and the majority requiring a low opening deposit of £25 or less.”
The finance expert also discussed the importance of families picking the right account for their children.
She added: “While some accounts give the child full control of their savings, some require a parent or guardian to approve transactions.
“So parents will need to consider this when choosing which account to open.
“Other options to consider include Junior ISAs, where any savings cannot be touched until the child’s 18th birthday, or Premium Bonds.”
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Here is a full list of the best Junior ISAs which are on the UK market:
Coventry BS – pays 3.10 percent at a variable rate
Beverley BS – pays 2.95 percent at a variable rate
Monmouthshire BS – pays 2.80 percent at a variable rate
Dudley BS – pays 2.80 percent at a variable rate
Earl Shilton BS – pays 2.75 percent at a variable rate
Family Building Society – pays 2.70 percent at a variable rate