Saving for grandchildren | Read more about savings | Molly Bloom’s blog
Many people save money for themselves, for example for life as a pensioner, but sometimes you want to save money for someone else. Saving to their children to give them a good start in life is common and many also want to start saving for grandchildren. There are a few things that can be good to think about before you start saving, so we have collected three tips on how to best save money for your grandchildren.
What kind of savings should I choose for my grandchild?
Two different types of savings tend to be popular when talking about saving money for someone else; to save in a capital insurance or investment savings account. One of the great advantages of both of these is that you do not have to pay tax on profits on every sale, which you must do if you save directly. Instead, a standard tax is deducted each year, which means that you pay taxes even if the value would decrease.
If you save in a capital insurance in your own name, you can choose to put the grandchild as a beneficiary and also decide when and how the grandchild should access the money. Saving in a capital insurance means that you pay an insurance premium and they may also come with other fees, so compare these before choosing a company.
An investment savings account thus has similar tax terms as a capital insurance but often lower fees. However, you cannot control the payout time nor put your grandchild as a beneficiary in an investment savings account. Therefore, to ensure that the money in the account goes to your grandson in the event of death, you must therefore enter it into a will.
Should I save in my own or grandchild’s name?
If you save in your own name, you control yourself how the money is managed and when your grandson should have access to it. Legally, the money is still yours so to make sure that the savings go to your grandchild, you should enter it into a will, unless you have them in a capital insurance where you can determine beneficiaries.
If you save in the grandson’s name, the grandson himself will decide on the money from the age of 18. You usually need parental permission to open an account in the grandchild’s name. In addition to this, there is another aspect to keep in mind when choosing whether to save in your or grandchild’s name.
How do I fair to several grandchildren?
Maybe you are lucky enough to have more than one grandchild you want to save money for? From a fairness point of view, it is easier to distribute the saved money among your grandchildren if you have a common saving for them all. In order to solve it, the saving must be done in your own name. When the time comes to give the money to your grandchildren, you simply divide what you have saved into equal parts. Should the money be saved instead in the respective grandchildren ‘s names, the final sum that they can benefit from varies greatly, since the saving will have been done during different periods with different conditions in the market.
Save for your grandchildren at Lollo Klood
When you invest your money with Lollo Klood, you lend money to creditworthy individuals through our digital platform. With low risk and high monthly returns you can thus create a saving for your grandchildren. The return is paid out once a month but can also be reinvested in new loans and thus grow further over time. When you want your grandchild to have access to the money, you simply choose to have the money paid out.