Saving For Someone Else's Children

If you're a grandparent, aunt, uncle or family friend who wants to save a little money for an adorable toddler at the best rates possible, it's much more difficult than you'd think!

Who would you say influenced you most in a positive way regarding money management when you were growing up? Apparently, it's mums. According to a recent survey from Scottish Widows, mothers tend to have the most significant influence when it comes to teaching their children how to handle their money when they grow up.

I can go with that. My own mother was very good with money when I was a child even though I suspect she would rather have enjoyed being a profligate spender had she been able.

But what if you don't have children of your own to practise on and you want to put some money aside for someone else's child? And maybe, at the same time, you'd like to help teach them the value of money?

A few years ago, my brother and his wife kindly produced a couple of nieces in rapid succession for me to dote on, so I asked permission to save for their future. Actually, I initially told their parents I was going to save some money for their children but when they told me they could finance their children's future perfectly well themselves, thank you very much, I ended up practically begging to be allowed to play a part. Thankfully, they let me!

And, that's where the problems arise. I, as Auntie Jane, can walk into a High Street bank to open a savings account for my two nieces but I immediately get confronted with demands for certified copies of the children's birth certificates or passports or some sort of evidence that the children actually exist. There's also the fact that children's savings accounts are tax-free as long as one of the parents fills in the all-important R85 form for Revenue & Customs when the account is initially opened.

That means that if I want to open an account in the name of someone else's child, I have to involve the parents anyway, so they can provide me with the relevant information.

At the time - and this was a year ago - it was a pain for them and it was a pain for me!

Nevertheless, if you have the inclination to save for a child who is not your own - and assuming the parents will assist you with the required information - where's the best place to save cash for children?

According to the independent research site, Moneyfacts, the following accounts are worth considering:

Of course, parents can use these acccounts too!

Anyway, yes, it was worth it in the end. The children currently each have £136.65 in their accounts which to a 6 year-old and a 4-year old, is a 'fablous' sum of money. At the moment they don't know about the index-tracker I set up for them a few years ago but I plan to save that 'fablous' surprise for another day!

Find out more about Saving for Children