Sunday, November 04, 2012

Setting aside savings for a child

Many parents want to set aside savings for their children - maybe for education, for marriage or other purpose.

An endowment policy was the traditional method used in the past to set aside the savings. However, the endowment policy now provide a poor return, usually not sufficient to cover inflation, and should be avoided.

A better choice is to open a share account for the child and to buy the STI ETF (which is an indexed fund invested in the top 30 shares in Singapore) for the child. The account can be in the joint names of the parent and the child.

Attend the FISCA talk on investment and financial planning to learn about how this can be done, and how to manage the risk of investing in shares.

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