Tips on current accounts for children

Article Written By: Noelmellor

When you are looking to get your children used to the idea of saving their pocket money and managing their finances, setting up a bank account for them is an important first step. You may find that such a move helps prepare them for a more stable future and provides them with valuable financial education they would not benefit from elsewhere.

For many youngsters, there are all kinds of tempting options to help them spend their money - and often these can prove expensive. From games consoles to mp3 players, gadgets and toys to concert tickets and clothes. A savings account can provide a great starting point to build up a cash to buy the things they need.

In addition, it could help instill in them a respect for financial management that stays with them. Many savings products even offer tax-free variable interest rates for this type of saver, which in many cases is paid on a quarterly basis.

So, with a savings or current account providing your child an opportunity to make the most of their pocket money, parents may be concerned about how this is monitored. Most products will allow the parent or guardian to manage the account until the child is ready to do so themselves, so this is simply something to remember when comparing the range of current accounts for children on the market.

However, as children grow older you might want to allow them more access to the account, particularly once they start their first part-time or weekend job. At this time it is likely they will start to see how their funds come in and inevitably go out. It also gives them the chance to gain an understanding on the importance of budgeting for things like mobile phone top-ups, days out with friends, music downloads or other treats.

It has been suggested in the past that more needs to be done to help kids with some of the financial issues they'll face in later life - something you could do by setting up an account on their behalf. In a recent article for Citywire, one young writer by the name of Patrick Jones explained that he might have benefitted from more education on things like bank accounts, mortgages and interest rates and welcomed government plans to teach more about money from an early age.

With this in mind, getting your children used to the idea of money management now could stand them in good stead for the future.

About the Author

Noel Mellor is highly experienced across a range of economic matters including personal banking and business banking.

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