In today’s instant gratification world, people seem to be spending more and more money and effort trying to outdo their previous gift giving seasons.

Eager to please, givers can become consumed by the increasingly flashy and popular “must-have” gifts. But with time, children grow and mature, and, in essence, outgrow the toys, clothes, and gadgets that parents and relatives try so hard to keep them up-to-date with.

Instead of giving something that will inevitably become obsolete, why not look to an alternative gift that will help provide for your children’s future and help take some strain off of yours?

The Royal Gazette recently sat down with Betty Brown of First Bermuda Savings and Loan to discuss some of the products they offer that can make great potential gifts with even greater return.

<$>Royal Gazette: What do you suggest are some great alternative gifts for children this holiday season?

Betty Brown: We offer savings, call and deposit accounts that can be opened in the name of the parents as guardian for the child. An amount can be deposited on a monthly basis, as well as for birthday and Christmas gifts. Many clients choose to do this instead of giving toys, etc.

RG: <$>Can you explain what these accounts are?

BB: <$>Call accounts are the type of accounts where you have to give notice to take the money out .i.e. a 30-day call means you have to give 30 days’ notice to take any of the money out and the same with the 90 day call. The one-year deposit means the deposit has to stay for one year. The savings account may be withdrawn from at any time although the Bermuda Monetary Authority insists that since we are not a bank we must advise our savings clients that we may require notice to make a withdraw. The call accounts earn a better interest rate than the savings. Interest may be compounded i.e. added to the deposit on a quarterly basis, or deposit on a quarterly basis, taken by a cheque.

RG: How would I go about opening one of these accounts?

BB<$>: There are application forms that need to be completed, giving personal information, home addresses, telephone numbers and the like. It’s also a requirement of the Bermuda Monetary Authority that we request information about the origin of the funds being deposited and the maximum/minimum amount that is likely to be deposited at any time.

RG<$>: What are the benefits of opening an account like that for a child?

BB<$>: Starting an account for a child is the first positive step toward establishing a savings plan that they can continue when they are old enough to take the account over.

Letting the child share in the savings plan and seeing the statement of their account plus the interest being deposited on a quarterly basis will teach them the value and excitement of having their own account.

Getting them to deposit some of their own spending money will certainly start them on the discipline of saving which should stand them in good stead for the rest of their lives.

RG<$>: Something like this will help not just the child but the parents as well, right?

BB<$>: For the parent, the discipline of depositing a certain amount each month toward an education fund is sound practice toward planning the education of their child. Start early and watch it grow.

Try to make these payments the first deductions from the budget each month and only spend what is left.

RG<$>: What is the minimum to open an account?

BB<$>: For a savings account, we require $100. For 30 and 90 day call accounts, $500, and for one year and two to five-year accounts, $2500.

There are several interest rate bands depending on the amount of the account, ranging from two percent per annum for the savings to four percent per annum for the longer term and higher amounts.

RG<$>: And how much of a monetary commitment is required to sustain the account, either by myself or the parent?

BB<$>: This depends on the budget constraints and the self-discipline of the individual. They should make a commitment of, say, $100 per month. If possible, more.

Set your child up for financial success at an early age