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Setting your child up for financial success does not have to wait until they are older. One of the smartest steps you can take as a parent or guardian is to start investing for your child early.
Thanks to the power of compound interest and long-term growth strategies, even small investments (as small as ₦10,000) made consistently over time can grow into a significant financial cushion for education, future projects, or starting a business. Click here, if you need quick assistance to start or continue investing for your kids.
Otherwise, here is a step-by-step guide on how to open and grow an investment account for your child.
Step 1: Gather the Right Documentation
To open an investment account for a child, you will need to provide a few important documents for both yourself and your child. These documents help verify identity, establish legal guardianship if they are not your biological child, and comply with regulatory requirements. Here is what you will need:
Required Documents
Individual Account Opening Form (Please ensure all details are accurately filled out).
Valid Identification
- For the parent/guardian: Driver’s License, Permanent Voter’s Card, National Identity Card, or International Passport.
- For the child/ward, a birth certificate will suffice as a valid form of identification.
- Bank Verification Number (BVN) of the parent/guardian.
- Passport Photograph of both the parent and the child.
- Proof of Address (dated within the last 3 months). This could be: a recent utility bill (electricity, water, etc.) or, if unavailable, a tenancy agreement, rent receipt, land use charge, or a bank statement showing recent transactions.
⚠️ The address on any of these documents must match the one stated on the account opening form.
Step 2: Complete the *CSCS Direct Cash Settlement Form (Optional but Important)
Alongside the account opening form, you will also complete a CSCS Direct Cash Settlement (DCS) Form. This form allows the proceeds from any trades made in the investment account to be deposited directly into your bank account. While it is optional, it is a good idea to complete it and select either ‘Yes’ or ‘No’ so your preference is clearly stated. * CSCS stand for Central Securities Clearing System. Learn more about CSCS here.
Step 3: Fund the Account and Choose Investment Options
Once the account is set up and verified, you can begin funding it. Start with an amount you are comfortable with and contribute consistently—monthly or quarterly works well. Here are a few investment types ideal for children’s accounts:
a. Mutual Funds: Low-cost and diversified, suitable for long-term growth. Click to learn more.
b. Stocks: Investing in blue-chip or dividend-paying companies can offer steady returns over time.
c. Fixed Income Instruments: Bonds or treasury bills provide stability and predictable returns.
d. Education-focused Funds: Tailored to grow until a specific goal, like when they start university.
Step 4: Invest Consistently and Review Periodically
Consistency is key. Whether you are investing ₦5,000 or ₦50,000 monthly, staying committed can yield impressive long-term results. Review the portfolio annually or semi-annually to ensure it is aligned with your child’s goals and current market trends.
Step 5: Talk to Your Child About Money
As your child grows, involve them in the investment process. Explain what you are doing and why. This helps nurture financial literacy and responsible money habits from an early age.
Why Start Now?
The earlier you start, the more time your child’s investments have to grow. A 10-year head start can make a significant difference when it comes to wealth building. Additionally, this approach alleviates the financial pressure on you later in life when larger expenses arise.
Give your child a head start in life. With the right setup and mindset, you can build a foundation that supports their future dreams. Do not wait until they are older. Start today, and watch their future flourish.
To start investing today, download the Coronation Wealth Plus App on Apple IOS or Android Play Store.
You can contact us directly on this number: Funke Sadiku– Tel: 08080472681 or email: sadikuo@coronationsl.com
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