Best low cost savings index account for children

T

Techhead

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Want to open a savings account with a life company for my child for college.

Any recommendations for best ones with lowest management charges? I was looking at Zurich Child Savings Plus but the Management charges look steep from 1.75% up
 
Hi Ger

I wonder can you set up a child account using the execution-only service outlined in the thread you linked above?

Would be nice to avail of the tax-free annual gift allowance to contribute to a fund in the child's name.

Thanks
Stan
 
Might also be worth looking up "bare trusts" in this context.

What Is A Bare Trust? - HOMS Assist

Bare Trusts are a tax efficient way of providing for a child's future. Read this article to discover how a bare trust works and the benefits of using them.
homsassist.ie homsassist.ie
 
Brendan Burgess said:
Pay down your mortgage.

Risk-free
Tax-free
Costs-free

Keep an account on Excel with the child's name on it and watch it grow as you make the overpayments.

Brendan
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Hey Brendan,

Could you slightly elaborate on this for me? I used to post here years ago, different stage of life now with 4 kids. They each currently have a credit union account with a gross savings of about €30k.
 
It's different if it's your kids' own money.

But some people put money aside for their children's education. So they have €30k in the credit union earning nothing, while paying 4% on their mortgage. This costs them €1,200 a year. They would be better off paying down their mortgage.

Brendan
 
Brendan Burgess said:
It's different if it's your kids' own money.

But some people put money aside for their children's education. So they have €30k in the credit union earning nothing, while paying 4% on their mortgage. This costs them €1,200 a year. They would be better off paying down their mortgage.

Brendan
Click to expand...
Its currently made up exclusively of there children's allowance earning zero is correct.
 
The source of the money is irrelevant.
But you have been building up this large amount of money earning nothing while paying interest on your mortgage.

If the money is not in their names, withdraw it and pay down your mortgage.

Brendan
 
Brendan Burgess said:
The source of the money is irrelevant.
But you have been building up this large amount of money earning nothing while paying interest on your mortgage.

If the money is not in their names, withdraw it and pay down your mortgage.

Brendan
Click to expand...
I don't understand this either. If I pay €30k off my mortgage then my mortgage will be cleared 2 years earlier, but when I send my kids to college, I won't have €30k to pay for their accomodation.
 
Homepayer said:
I don't understand this either. If I pay €30k off my mortgage then my mortgage will be cleared 2 years earlier, but when I send my kids to college, I won't have €30k to pay for their accomodation.
Click to expand...

Perhaps the young adults won't want to be "sent to college"!
 
Techhead said:
Long time horizon over 10 yrs
Click to expand...

Homepayer said:
when I send my kids to college, I won't have €30k to pay for their accomodation.
Click to expand...

If your kids were going to college next year, then this would be correct.

But the OP is sending them in at least 10 years.

So if he pays €30,000 off his mortgage
He will have reduced his mortgage balance by €44,000 after 10 years.
His repayments will be lower, so he will have more money to spend on college accommodation.

Brendan
 
Probably not rational but I don’t like to pay off the cheapest debt I’ll ever have right now. I’ve already paid off some. Also thinking about things like life cover where mortgage paid on death and cheap bank fees. Fiscally I know you are right but I take a measured approach and can’t bring myself to go all in on paying off the mortgage.. oh and it’s fixed for 4 yrs at a low rate :)
 
Brendan Burgess said:
The source of the money is irrelevant.
But you have been building up this large amount of money earning nothing while paying interest on your mortgage.

If the money is not in their names, withdraw it and pay down your mortgage.

Brendan
Click to expand...
1672757715869.png

Apologies for the most likely stupid question here, but above snapshot is what would be the result of paying down to the mortgage. So what is the net result here circa -€4k or am i missing something im sure i am.
 
@Jollyman
I used the uk site Mortgage Overpayment Calculator for my calculations. The numbers are in £ but its the same calculation

331308 for 23 years at 3% puts the repayment amount at 1660 per month and 458,980 in total
Paying 35k off this today, and keeping the monthly repayment at 1660, the total amount to be repaid is 427,770, and you clear our mortgage 3 years 3 months earlier.
Thats an overall saving of 31,210 over the lifetime of the mortgage. However that does not take into account the time value of money

I cannot see a 4k comment - but I do see a 1200 saving in interest per year => 35% @ 4% - if that helps
 
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