App claims it can make £20,000 by your child’s 18th birthday by stashing away pennies from your purchases
ISA is linked to a payment card with deposits made every time you buy something
A NEW app is claiming it can help you save £20,000 for your child by the time they are 18, simply by stashing away your spare pennies.
Moneybox links a stocks and shares ISA to your debit card and rounds up your purchases up to the nearest pound before investing the extra pennies.
Here's everything you need to know.
WHAT IS IT?
Moneybox is an app through which you can open a stocks and shares Junior ISA.
The ISA can be opened from the day your child is born.
As it is a stocks and shares ISA rather than your payments being stored in a bank they will be invested, with the possibility of larger pay-outs.
When your child turns 18 they can access the cash.
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HOW IT WORKS
A card you use regularly is connected to the app securely.
The app will then round up purchases made using the card up to the nearest pound.
The extra pennies from each purchase will be paid into the ISA.
So if you purchase a coffee for £2.60, 40p will be paid into the app or a train ticket bought for £3.10 will see 90p paid in.
Moneybox will then invest your spare change into more than 6,000 global companies including Disney and Netflix.
HOW MUCH COULD I MAKE?
Moneybox claims you can save £20,000 by the time your child turns 18.
It says the average user makes about 30 transactions a week saving about £12.
With two parents making deposits for 18 years the app's creators say the investment could grow to more than £20,000 by the time the kid reaches adulthood.
You can log into the app and see how the investments are performing at any point.
Moneybox charges a £1 a month fee and 0.45per cent of the value of your child's investments each year.
WHAT ARE THE RISKS?
There are three investment choices to choose from within the app depending on how safe you want your investments to be.
The options are called the cautious squirrel, the balanced owl and the adventurous fox.
Moneybox is authorised and regulated by the Financial Conduct Authority and covered by the Government's Financial Services Compensation Scheme up to a limit of £50,000.
WHAT THE EXPERTS SAY
reports that Hannah Maundrell, editor of , said: “So many people struggle to find spare cash to save for their children’s future that anything that makes it easier should be a good thing."
But, she warns parents to consider their options carefully.
She adds: "You shouldn’t jump in and apply without checking the small print because junior ISAs do lock your child’s savings up for the long term.
"Your children will get full control of the money when they turn 18 and you won’t get a say in how they spend it."
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