Sep 5 2007
Parents looking to secure a better financial future for their children have been urged to focus on the interest rates on a particular savings product and not the various gimmicks that often accompany them.
Abbey suggests that marketing tactics used by child savings product providers can distract parents from the important issue of how best to invest money for their children's future.
Indeed, the financial services firm warns that one in five child savings accounts offer rates of interest below five per cent and that three per cent offer returns lower than the retail price index.
"Parents should never choose to save for their children's future based on a cute name, or promotional items such as toys or a colouring book," said Reza Attar-Zadeh, head of savings and investments at Abbey.
"It is positive to encourage parents and their children to save from a young age. However, any decision on a savings account for children should be taken on the rate and specific terms and conditions of an account," he added.
A number of financial services firms recently marked the fifth anniversary of the introduction of child trust funds for children born in the UK.
