Nationwide has launched a new account, the Children’s Future Saver – and it’s specifically designed for those with ‘parental responsibility’.
This initiative aims to encourage families to save smaller amounts over a long period for the next generation.
However, it is only available to people who have children within a certain age range.
The account, officially launched on March 19, is open to parents of children aged 17 and under, meaning account holders must be born between 2007 and 2025.
It offers an attractive 3.55% AER/gross interest rate, and parents can invest up to £5,000 annually.
If you open this account when your child is born and contribute the maximum amount each year, this could accumulate to over £100,000 before they turn 18, providing a substantial nest egg for your children as they embark on their adult life.
However, there are additional requirements. To promote long-term saving, only one withdrawal is permitted from the account per annum.
If more than one withdrawal is made during the account year, the interest rate for the remainder of that year will decrease to 1.80%.
Once the anniversary of the account opening passes, it will revert to the higher rate again.
At present, the account can only be opened by visiting a physical branch. However, Nationwide plans to make it available online later this year.
Richard Stocker, Head of Savings at Nationwide, said: “Saving is a skill for life, and we recognise the need to help families save for their children. Many people want to start saving for their child’s future as soon as they are born as they want to help build a healthy savings pot for when they become adults.
“Our Children’s Future Saver account allows them to put money away regularly or add in cash presents from family and friends to build up a savings nest egg at a slow and steady pace. Getting into a savings habit is an important life skill, which people can teach their children so that in future they are ready to manage their money independently.”
