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Saving for your children is something that many parents do throughout their childhood, but what is the best way to save? Here are some tips on the different types of savings and what's important to consider.

Parents save an average of SEK 597 per month per child, according to a new report from Länsförsäkringar. In 2005, parents saved an average of SEK 414 per child. At that time, the average salary was SEK 19,842. Today, the average salary has increased by around SEK 15,000 per month, which means that child savings should be around SEK 736 per month to follow the change in income.

High interest rates, soaring electricity and food prices are affecting the finances of many families, but if you have some form of savings, it's better than nothing. Statistics show that parents who save regularly save more for their children than those who save more sporadically, for example for birthdays. Länsförsäkringar's recommendation is therefore to have monthly savings to ensure that the savings actually materialize.

Remember to adjust your savings in line with inflation or your salary growth. Common reasons for saving for children are contributions to driving licenses or housing. The cost will increase in line with inflation, which means that savings will also have to increase gradually if your child is actually to have the opportunity to get a driving license or a home when the time comes.

How to save?

If you save in your child's name, he or she will have access to the capital at the age of 18. If you save in your name, you choose when your child will have access to the money. Think about what you want.

There are different ways to save for children. Most parents save in funds, which has proved to be profitable; children of parents who have invested their children's savings in funds have performed well*. Over the last 30 years, the stock market has increased by around 11% per year on average. Children of parents who regularly set aside money for their children have around SEK 140 000 more in savings than children in families who do not save for their children.

3 different accounts for savings

The type of account you choose for your child savings depends on what you are saving for and how long you intend to save.

1. savings account
For savings intended as a buffer for unforeseen expenses in the near future for the child, it is best to save in a savings account. Do not have too much money in the short-term buffer. If you have a savings horizon of more than five years, it has historically been shown that the fund and stock markets have given better returns*.

2. investment savings account
For long-term savings, you can choose an investment savings account (ISK). An investment savings account allows you to accumulate your savings in shares, funds and other securities. You can buy, sell and switch as often as you like, and you don't have to declare and tax individual gains. Instead, you pay tax on a flat-rate income calculated on your savings each year. This is done automatically via your tax return.

3. endowment insurance
Another option for long-term savings is to save in an endowment policy. You invest your savings in selected funds, up to a maximum of 20, which you can switch free of charge whenever you want. You pay an annual yield tax on the value of the policy and on the payments made. This means that you do not need to declare either withdrawals or fund switches; these are handled automatically via your tax return. Unlike an investment savings account, with endowment insurance you can control how and when the money is paid out to the child.

*Saving in funds and shares always involves a risk
Past performance is no guarantee of future returns. Money invested in funds and shares can both rise and fall in value and you may not get back the full amount invested.

Read more about the risks

Summary:

- Saving a little each month is usually more beneficial than saving sporadically.
- Think about the purpose of your savings and then choose the type of account.
- Think about whether you should save in your name or your child's name, depending on when you want your child to have access to the money.
- Remember to adjust your savings in line with inflation or your salary growth.

Länsförsäkringar has a lot of information and tips when it comes to family finances. Read more about monthly savings for children and get help to get started with saving.

Find out more about saving for children

Report: How we save for our children in 2024

Deposit guarantee

The bank's accounts are covered by the government deposit guarantee as decided by the National Debt Office. The deposit guarantee is an important security for you as a bank customer. If the bank goes bankrupt, you are entitled to compensation for your total account balance in the bank up to a maximum of SEK 1,050,000. The Debt Office pays the compensation within seven working days from the day the bank was declared bankrupt or the Swedish Financial Supervisory Authority decided that the guarantee should be activated.

In addition to the amount of SEK 1,050,000, depositors may receive compensation for certain specified events, such as the sale of a private residence, severance pay, insurance compensation of up to SEK 5 million.

Deposit guarantee