Saving plans for Children’s future
All parents, as soon as their child comes to life, try to do their best to secure his/her future. In the past, the parents, at the birth of the child, used to open a bank account and save money from their salaries so that when their child would reach a certain age, he/ she could be given the deposit book to go and collect the money that had accumulated until then.
Through parents’ need to save money to be given to their children when they come of age for their own needs, either for studies, or for their first professional endeavor, or even for some purchase they want to make, parents turn to a private savings scheme and capital formation policy with an insurance company. Thus, through this kind of savings, parents can secure systematic savings, even for small sums, which on expiration will provide guaranteed capital to their children.
What does the parent offer to the child through a savings and capital formation policy:
- Savings reminder whenever we choose to pay premiums for the child’s policy
- Fixed premium installment or annually adjusted to protect against inflation & to accumulate larger capital
- Higher interest rate than those of banks
- Ensuring that premiums on the policy will be paid by the Insurance company until it expires, even in case of premature death of the contracting party (parent – guardian)
- Option to pay extra money, in addition to the scheduled one, to accrue more capital
- Option to increase and/or reduce premium installments, depending on the parent’s financial capabilities·
- Free payment option as per month – 3 months – 6 months – annually
- Guaranteed savings return
- Minimum return, money paid plus a profit·
- Possibility of partial payments to the beneficiary (child) or one-off expiry·
- Tax-free way of transferring property from parent to child
- Protection against ‘haircut’ deposits, since money is an insurance product and not a bank deposit
What is the minimum amount that someone can save?
The minimum amount of savings for a sum to accumulate when a child comes of age is 30 € / month or 360 € per year. This translates to 1€ per day.
Can any other relative, other than parents, create a savings-raising fund for children?
Many times grandparents choose this kind of gift to their grandchildren in order to help them financially for their future.