Every year more and more parents are measuring the need for childcare. Money can be an advantage for our child in the future, which, thanks to the ever-expanding social scissors, can mean the necessity and the only chance. Higher education is becoming more and more expensive, and it is becoming increasingly difficult to move from home and it is becoming more and more expensive to start an independent adult life. However, the question arises as to which of the best children’s savings in 2018?
It is important to state at the outset that the various savings options offer different time horizons and goals.
Save piggy bank
The Save piglet (as its name implies) is an online piggy bank. You know much more than spending your money here and looking at the online interface. We get low interest and (at first sight) free account management. However, the devil is hidden in the details, so it’s worth looking at those costs a little better!
The article is based on the Save condition list effective on January 1, 2018
We can see that the interest rate is 0.05% at the moment. It is currently because it may change as the interest environment changes. This account is also not intended to maximize interest rates. So every year we get 500 USD per year for every 1 000 000 USD! But it is important to notice a condition. The annual 0.05% interest rate applies if our savings are below USD 5 million (below) and there has been no debit in the reference month (we did not withdraw money).
For a bill above 5M or for an invoice value of less than $ 10,000, the interest rate will be 0.01%. EBKM: 0.01-0.05%.
Big advantage of Save piglet
account management and account opening are free of charge. However, there are additional costs associated with your account, such as:
- in case of check deposit 113 USD + 0.39% transaction (for USD 10 000 monthly payment: 152 USD / month)
- Subscription fee for security sms messages is 56 USD / user / month
- Token usage fee: 56 USD / user / month
- SMS messages: 236 Ft / month or 25 ft / sms (say 25 USD / month for one deposit)
Thus, the monthly usage cost of a Save piglet will be USD 289 for an average use . Of course, the bank writes that the cost of maintenance is free of charge, which is why we play the words and write “usage costs”.
If we would withdraw money from the Save piglet,
then we have to pay attention to the costs of the loads. This means that the cost is USD 0.64, ie USD 6,400, for a Save bank account based on the valid list of conditions at USD 1,000,000.
However, you may be asked for a referral when the Piglet account and the current account are the same person (parent). In this case, free of charge. However, it is important to take into account that it is not certain that Save’s current account will be the most optimal solution for us in x years. So we may not be able to request a free transfer.
Bond and Start Securities Account
For all domestic children born after December 31, 2005 * and foreign children born after June 30, 2017, the state provides 42,500 forints of life start-up, which is deposited in the Hungarian State Treasury on a minimum deposit account. In order for this initial amount to be transferred to the child’s name account and to have a so-called Bond Bond there. You must open a Start Securities Account at the Hungarian State Treasury.
Baby Bond Features
- Duration is 19 years from the date of issue.
- The annual interest rate is equal to the sum of the value of the interest rate base and the interest premium.
- The interest rate base is the same as the calendar year preceding the year in which the interest rate was established, as a percentage of the annual average inflation (consumer price index) published by the HCSO.
- The interest rate is 3%.
- The credit on the Start Securities Account is credited on February 1 each year ***.
- Assistance of up to 10% of annual payments but up to USD 6,000 will also be credited.
- After the account is opened, the Bonds are purchased automatically from the amounts credited to the Start Securities Account.
So, we can fully obtain the state subsidy ( USD 6,000 / year ) if we put aside $ 5,000 a month on this account. So we want to set aside a higher amount of money, but we won’t get more state support.
Usability is commonly referred to as a particularly negative factor for the baby bandage. Namely, we are talking about a specifically tied product, which is defined by the current law. So, in the future, the usability listed below may become more stringent.
At present, housing in Hungary, studies in Hungary, creation of conditions for childbirth, career start and other purposes as defined by law can be used. We are talking about an extremely knit product, because for example, our child cannot use this amount to “officially” study or travel abroad.
You have to declare usability, so in principle you can play the system so you don’t have to prove anything. I strongly warn everyone not to play this, because they can change the regulation at any time, and it’s not too lucky to force our child to lie.
A very popular product is the Housekeeping Fund, but its use is limited (housing only). This can be a problem because our child will only be able to use the money to buy a home or work on a property. In addition, in the case of a maximum term homeowner deposit (10 years), we can collect approximately USD 3.2M at maximum (20,000 per month), which can be basically self-sufficient.
The biggest benefit of a housing savings bank is its state-subsidized state support (30%), which means that the state adds 30% to every payment, up to 72,000 forints a year. Contracts can be multiplied if there is a “free tax number” in the family. Indeed, family members can declare that they want to spend their home savings for our purposes.