Invest in your Children's Future with an Investment in their Name
Every parent wishes to provide for and give the very best that they can to their children, especially when it comes to securing their future. But you may be wondering how to go about financially planning for their future and when the best time is to start.
An excellent starting point is to invest on behalf of your child. Because when we say that it's never too early to start, we really mean it!
Opening a unit trust account
A viable route available for parents looking to put money away for their child's future is to open a unit trust account in your child's name. A unit trust enables people to invest in important assets such as shares, bonds, and property to help grow money that they have put away.
This route offers greater flexibility than other investment options, such as tax-free funds, as you are able to choose from a vast majority of underlying funds. Another upside of this option is that there is no limit on how much you contribute each year and that there are no financial consequences if you withdraw funds. But, unlike tax-free funds, you do not benefit from the tax-free growth.
Anyone can invest
Opening an investment account offers the perk of people other than parents being able to donate to the fund. This means that friends, family or long-lost distant relatives can contribute to the fund for important events such as birthdays, Christmas, the start of elementary and high school, graduations or any other significant millstones.
Your children will really thank you on their 18th birthday when they already have savings to put towards their education, the overseas trip they always wanted to take or their dream car.
In terms of ownership, if, for whatever reason, your financial situation changes, you have the option to transfer the investment from your child's name to yours. However, you can only do this if your child is under the age of 18. Once they turn 18, they will be in charge of the fund.
Your child can opt for you to continue to manage the investment. In this case, they need to provide written permission to the investment manager permitting you to gain access to the funds as well as make decisions about asset allocation.
Invest in your child’s future with PBA
Opening an investment account is a very generous act of foresight that can open countless doors of opportunities for your children. Contact a broker at PBA to help you make informed decisions on what fund to invest in and optimise returns. Let us help you invest in your children's future!
Phone: 011 803 9686