Parents Should put Christmas Cash in Savings Account

Parents are being urged to put their child's cash presents into a savings account this Christmas.

With cash gifts becoming a popular choice for kids, moneysupermarket.com is urging parents to look at the benefits of saving cash gifts in a cash-based savings account with a good interest rate.

The website says there is huge incentive to put surplus Christmas money away to grow into a good-sized savings pot for use in later life.

It said parents who invest a regular sum of £50 a month into a Harpenden Building Society's 18 Club children's account paying 5.22 per cent AER could see £18,129.50 after 18 years. If this is helped by annual top-ups of £200 at Christmas there could be over £24,000 in the bank.

Stuart Glendinning, director of savings at moneysupermarket.com said: "While perhaps not as enticing as the latest toy, setting aside Christmas monies to start up a savings child savings account will enable parents to give their child a truly valuable start for the future. With an array of children's accounts on the market with rates as high as ten per cent, putting even small additional amounts away boosts interest earned, over a period of time, especially considering the interest can be tax free."