Many new parents open a savings account for their baby early on. Almost all Dutch savings banks respond smartly to this and offer a special baby savings account. But how does this baby account distinguish itself from a regular savings account and how do you find the highest interest child savings account that best suits your baby from the extensive range?
Savings account for baby
A savings account for babies often offers nice extras compared to a regular savings account. Your baby will receive a hug, children’s book and / or money box when you open the account. In addition, your child often receives playful information from the bank at a later age about saving and dealing with money as he / she gets older. However, until the 18th birthday, only the parent or guardian can withdraw money from the savings account.
Keep in mind that one savings account for babies is not the other. For example, there are savings accounts that you can only open if your child is younger than, for example, 10 years old or, conversely, older than, for example, 12 years old. With some banks it is also not allowed to withdraw money for the child’s 18th birthday. So compare not only the interest, but also the conditions of a baby savings account.
Tip! Do you have extra savings for your baby? Then a deposit might be an interesting option. A deposit usually generates a higher interest rate than a baby savings account, especially if you opt for a longer term. The disadvantage is that you cannot withdraw and / or top up money in the meantime.
Open account for child
However, you can also choose to save for your baby in your own name and open a regular savings account. As soon as your child turns 18, you donate the saved amount to him / her. However, the disadvantage of this is that you then pay gift tax in one go on the amount saved, provided that the amount exceeds the exemption. If you save in the name of your baby, you will benefit from this exemption every year. There is a good chance that you will save less than the exemption each year, which means that you will not pay a gift tax.
Baby bank account – Baby opening account choices
Before you open a savings account for your baby, it is important to carefully consider a number of things. First determine in which name you want to save and what you attach great importance to: a high interest rate , good conditions and / or a lot of freedom. The one does not necessarily exclude the other, but you often see that a higher interest rate is accompanied by less freedom. And nice extras are often at the expense of interest.
Once you have clarified for yourself what you think is important, you can compare savings banks on these points. Do not choose the bank where the savings account of you and your partner runs as standard, but go for the bank with the account that is best for your baby. You can then easily open the account of your choice online. Keep the citizen service number of your baby and the account number of your checking account to hand.