Children are guaranteed to receive a minimum amount when they withdraw their investment. This guaranteed minimum provides the investor with a sense of security opposed to high-risk options where profits are virtually never guaranteed.
Child bonds give an investor the flexibility of contributing a very modest monthly contribution. In times where the economy may be uncertain, the option of contributing minimal amounts is attractive. Conversely, child bonds allow one to make a lump sum investment, allowing the investor may choose to pay the monthly premiums in one lump sum. This will have the same effect as if one were contributing their monthly premiums. This option is ideal for grandparents who may want to make one contribution as a gift or at birth.
Child savings plan are somewhat different. They allow investors to open the account at any time. There are two types of child savings plans. One type is designated in the investors name, and gives the investor complete control of the investment. The investor can close the account, and withdraw from it at any time. The other type is a trust account. A trust account is held by a trustee. The trustee has complete control over that account until the child reaches 18 years old. The investor in this type of account does not have the ability to withdraw funds or close the account.
Whether one chooses a savings plan or a savings bond, a child's future financial stability is vital to their success in adulthood. Either option works toward the goal of securing long-term success.
The following useful tips and inquires will allow one to choose the investment that is most appropriate:
Determine what you are comfortable contributing to the account. Will it be a lump sum investment or monthly contributions?Determine if access to the funds is important to you or if you are willing to relinquish access until the child reaches 18.Be aware of any charges that may be assessed to the account. Some are assessed when changes are made to the account, and some are made on a regularly basis.Encourage friends, and family members to contribute.Start investing early in the child's life. The child savings plan allows investors to withdraw funds if necessary.Be a well-informed investor. Compare interest rates to determine which company will offer the best return on investment.Research your options. Evaluate your individual circumstances, and make an informed decision based on your circumstances.If you are interested in reading more information about child savings bonds and investment plans then please visit the following links:
Scottish Friendly - mutual societies such as Scottish Friendly supply financial services products. Mutual societies are owned by customers, or members.
Association of Financial Mutuals - you can find out useful information about mutual and friendly societies by visiting http://www.financialmutuals.org/
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