DECO informs…What is the best choice for my child’s saving

In this new column, Portuguese consumer watchdog DECO will be informing readers of various interesting issues and laws affecting consumer decisions.

Saving up for our children’s future is important in order to make sure that when the time comes, there is enough money to pay for college, for example. That is why many parents decide to open up a savings account for their offspring.

Therefore, we analysed banks’ proposals and came to the conclusion that children and youngsters’ savings accounts are not as worthwhile as those available for adults.

Out of the 20 pricing lists that we analysed, 13 offered accounts which were specifically tailored to children or youths, ranging from current accounts or term accounts to capitalisation insurance products. The problem is none of these options offer better returns in the first year when compared to some of the best deposit accounts.

Savings certificates (Certificados de Aforro) are better choices for those who may need access to money at any moment and, despite registering lower incomes, are not risky and the capital invested is guaranteed to remain intact.

Treasury bonds (Obrigações do Tesouro) are also a low-risk product, but are only a viable option for those who have no intention in seeing the money back soon. However, in order to minimise the transaction costs, one must subscribe to a €2,500 minimum capital.

All in all, a wary investor looking for good revenue should diversify his/her investment, such as opening a term account to guarantee some liquidity or purchasing treasury bonds in order to boost revenue safely.