Best investment opportunities to take care of children
Provide a good future for children with secure investments
If parents want to save money for their children in order to finance their studies or necessary purchases after they move out from home, it is not very wise to opt for insurances that accumulate capital such as life insurances or educational endowments. These investments run over a long period of time, yet the rate of return is usually rather low when compared with the money invested. Moreover, if such an insurance has to be terminated early, the costs are very high. Putting money into a simple savings account, on the other hand, may be a good way to put away money that can be accessed at any given time, but the interest rate is below average, the invested capital does not reap any significant gains.
Saving schemes as offered by many banks are equally low when it comes to the return on investment. Moreover, it is complicated to terminate these schemes early. Overnight money looks much more promising as the interest rate here is comparative while the money is easily accessible. Investment funds, however, promise an even higher return on investment. When looking at the long-term opportunities, investment funds concentrating on stocks have a comparably high annual return rate. Experts say that there is no need to fear slumps in the market as the market will recover in the long term. Saving schemes in which a small amount of money is paid every month in order to buy investment fund shares therefore promise to yield a high return rate and can be terminated at all times. A more secure way to invest money, albeit less promising when it comes to the return rate, are government-issued bonds. These are not traded on the stock exchange, the interest rate is roughly average but can be calculated over a comparably long period of time. Yet again, selling bonds before their maturity date may well influence the return rate to the negative. Similar, but a bit more flexible, are savings certificates with a pre-determined maturity. The interest rate depends on the maturity date, the amount of money invested usually has to be over a certain threshold, depending on the issuing organisation. An early termination is usually impossible, though. Overall, there are a lot of different investment opportunities. Parents who want to provide their children with a financial cushion should therefore seek investment counsel as early as possible.