All parents want the best for their kids’ futures. Here’s an idea that is definately the best when it comes to securing a great financial start for them.

From the moment children enter the world, parents and grandparents alike want to do everything in their power to ensure the best possible scenario for their upbringing and future, and this is often expressed in the form of a kid’s savings account.

The theory goes that when the child or grandchild goes o into the world they will have an attractive 20-year-old nest egg to begin their adult life with. A deposit on their first home, university fees, gap year travel, whatever it is that the fund is used for the gift-giver can know they have parted with something that is truly life changing.

While the above scenario is a heart warming one, there are a few key things to making it a success and given the rarity in which we get to sit down and plan a 20-year long investment, there is every reason to make it a successful exercise.

There is no denying that new parents are extremely time poor and often cash-strapped thus it is very important that the investment strategy is a simple contestant and, where possible, it’s automated. Done right, the financial burden can be painless and unnoticeable.

An iInvest for kids program is exactly that. In one brief meeting, you can open an account, arrange an automated contribution system at a value you can afford and a frequency that suits you and then let the team at iInvest do the rest. When your balance accumulates, iInvest will purchase a parcel of high-yielding, blue-chip shares for your kid’s account.

Many banks o er savings accounts specifically designed for children, to not only encourage saving from a young age but also an opportunity to learn about the power of compounding and how banks work. With current interest rates on children’s savings accounts siting at around 2.5 per cent, a $50 monthly contribution over a 20-year period nets a return of approximately $19,000 (assuming a yearly inflation rate of 2.1 per cent).

As an alternative to money sitting in a low- yielding bank account, the Australian share market has netted a compound return of 10.26 per cent over the last 20 years. The same $50 monthly contribution to an iInvest for Kids account where regular parcels of blue chip shares are purchased, would have netted a return of approximately $45,000 over the same 20-year period. The process is not only financially viable, but teaches the child an invaluable life lesson in savings and investment. Talk to an iInvest financial adviser about securing your child’s financial future.

Visit www.iinvestsecurities.com.au

iInvest Securities is an Authorised Representative (#431611) of Zodiac Securities. This is information is general advice and does not take into account your personal circumstances. Historical financial returns are not indicative of future financial returns.



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