For children the bank of mum and dad is the best thing since sliced bread. You don’t have to pay anything into it and yet it provides you with all the money you need. Toys and sweets when they’re little, clothes and gadgets when they’re growing up and cars and houses when they really should know better!

However, in the short and long term it’s better to encourage your children to stand on their own two feet and get involved in saving as early as possible.

So if you’re a parent, grandparent or guardian, and want to open an account for a child, below are a few options that we think you should consider.

#1 – Children’s savings accounts

Savings accounts for children are perhaps the most common way for parents to begin putting a little money away for their children. In return for depositing a monthly amount you will be rewarded with a higher interest rate.

Although these inflated interest rates are usually only available for a year or two they provide the greatest level of security and a decent level of interest – just remember to move your money when the promotional interest rate ends.

#2 – Junior ISA

As an adult if you ever have a little money to invest you are usually encouraged to invest in an ISA – a tax free savings account. However, as most children don’t pay tax anyway the benefits are limited.

However, it is an easy way to save money for your children and you don’t need to commit to paying money in each month so it’s great for lump sums like birthdays and Christmases.

#3 – Stocks and shares

Investing in stocks and shares for your children can be off putting for many, the thought of gambling your children’s money isn’t great.

However, with the potential for a much greater return on investment it is worth considering. You could divert a portion of their money into an investment account and see how it develops. Just be aware that the money in these accounts can go up as well as down and you could be left with nothing.

#4 – The traditional piggy bank

Don’t worry we haven’t gone mad, we know that compared to other options, putting your money in a piggy bank is a bad idea.

However, the advantage of a piggy bank is that it gets your children involved with saving money. They actually see their wealth grow and is probably the best way to encourage your children to save, showing them a bank statement doesn’t quite get them as excited!

We’re not recommending you put all of your children’s money into a piggy bank but why not put in say 10%? This way you can teach your children about the value of saving.

Overall, our opinion is to do a mixture of all of the above. It’s never good to keep all your money in one place and the same is true for our little ones.

For lump sums I would add the money to an ISA, a couple of pounds pocket money can be added to the piggy bank and if you can afford it a regular payment into purchasing stocks and shares or savings account.

Whatever you do decide just remember the sooner you start the more you are likely to earn.

This article was written on behalf of Ashley Park Debt Solutions who specialise in consolidation loans, debt management plans and other financial solutions.