There are a few things that are important to keep in mind when saving money for your child. In this article, Magnus Hjelmér, everyday economist at ICA Banken, gives advice on what you need to be aware of. A summary of "Save money for your child... below.
When the child has a savings account or mutual fund account in their own name, both guardians manage it until the child turns 18. This also applies if you are separated, or if one of you starts saving in the child's name after the separation. Some banks offer the opportunity to spend the account separately. In that case, one parent always needs the other's authorization to make withdrawals. Otherwise, you both manage the account freely and do not need permission from the other. Check with your bank what applies.
If you want to close the account, the money must be transferred to another account in the child's name. That account is also managed by both guardians. An alternative may be to get a child savings account with a lock. Then a welfare supervisor within the municipality must give consent to the withdrawal.
If you have a savings account or stocks for your child, you need to keep managing the accounts after the separation. It is important to talk about who will manage the money and take care of the investments. You also need to agree on what level of risk is acceptable. A high risk in investments can mean a lot more money in the end. It could also result in greater losses in case of a stock market crash.
When you make deposits into a savings or investment account in a child's name, it is considered a gift to the child. The child becomes the owner of the money. It is a crime to take the money back. For example by transferring it to your own account or using it for your own benefit. The money is managed by the child's guardian until the child reaches the age of 18, when the child gains full access to the account. If you, as guardian, make withdrawals from the account, the money must be used for something that benefits the child.
A common solution is to start a savings account or ISK in your own name where you save for the child. The advantages are that you yourself control the money and withdrawals completely. In addition, you can choose when the child will get access to the money. If you choose this solution, I recommend that you write a will, so that it is clear that the money is earmarked for your child if you were to pass away. At icabanken.se you can read more about different ways of saving for children.
When the child has a savings account or investment account in their own name, both guardians manage the account until the child's 18th birthday. If you have an investment or stock savings for the child, you need to agree on how the savings will be managed after the separation. If you save for the child in your own name, you control the money and withdrawals completely. It is important that you write a will so that it is clear that the money in the account should go to your child.
Magnus Hjelmér, vardagsekonom ICA Bank
3 maj 2024
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