CHARLIE WESTON PERSONAL FINANCE EDITOR – 07 AUGUST 2013
AT this time of year many of us are busy making sure our kids are set up right for school.
And one of the best things we can do to help our children on their way is to provide them with a great education.
We asked Simon Moynihan from price comparison and switching service bonkers.ie to consider the different ways in which you can plan ahead and budget for your children's college and university years.
The sooner we start saving for our kids' third-level education, the more we will be able to help them on their way when the big day comes to start college.
But with books and uniforms and getting the kids ready for school, setting up a college fund bank account at this time of year can get pushed aside until it's all but forgotten, Mr Moynihan said.
It is a task that is easy to put on the long finger too because when our kids start in primary school, we feel as though we have all the time in the world before we have to think about college.
"If we start saving for our kids when they first start school, we'll have 12 years' worth of savings available to them when they are getting ready to start at third level. And 12 years of regular saving can really add up," he added.
Just €50 per month in a good regular saver account could return nearly €9,000 in 12 years.
And €100 a month could return almost €18,000, with €130 a month you could end up with more than €23,000.
The best accounts for this kind of saving are regular saver accounts.
They are available from most banks and they are designed specifically to help make regular saving over the long term easy.
The good news is that unlike most other types of bank account, where interest rates have been falling steadily, regular savers are still paying very good rates of interest, Mr Moynihan said.
With so many regular saver accounts available, it can be difficult to choose the right one. And with accounts that will be used to save for the long term, a good interest rate can make a big difference.
Here is a selection of the best regular saver accounts available in the Irish market. We check out which ones really match up to the task of saving for college.
KBC Regular Saver Account – 3.5pc AER
KBC Bank has become known for offering strong rates of interest across its account range of savings products, and this account is no different.
It also offers a generous maximum balance of €50,000. Customers must deposit between €100 and €1,000 per month to maintain the interest rate, but KBC Bank does allow two monthly payment breaks each year.
Saving €130 per month in this account for 12 years at 3.5pc AER (annual equivalent rate) could yield €23,209.
Permanent TSB Online Regular Saver Account – 2.85pc AER
This year has seen Permanent TSB focus on its customers a little more and offer good value day-to-day banking products.
Like KBC Bank, its Online Regular Saver Account offers a generous maximum balance of €50,000 which should be more than adequate for college saving, even for parents starting before their children start school.
Customers can save anything from €1 to €1,000 per month, but there is no requirement to make a monthly deposit which could come in handy during times of unexpected expense.
Saving €130 per month in this account for 12 years at 3.0pc AER could yield €22,289.
Ulster Bank Special Interest Deposit Account – 2.5pc AER
Ulster Bank's Special Interest deposit account offers the flexibility of being available by phone, branch and online.
The bank also allows customers to withdraw whenever they choose without giving notice or paying a penalty. Monthly deposit amounts are also very flexible with a minimum of €1 and a maximum of €1,000.
However, the 2.5pc AER is offered up to a maximum of €15,000 whereby anything extra will earn just 1pc.
Saving €130 per month in this account for 12 years at 3.0pc and then 1.0pc could yield approximately €20,400.
EBS Family Savings Account – 3.1pc AER
The EBS tagline is 'Where Family Counts', so it is fitting that its regular saver account is called the Family Savings Account.
EBS offers a good rate of interest too. However, with a low €12,000 maximum deposit amount it may not suit parents saving larger amounts.
EBS also requires that after a year, any funds saved in the Family Savings Account are moved to another account with a rate of 2.30pc. Customers can add lump sums to the secondary account to the value of €50,000.