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child savings account
zerno
Posts: 45 Forumite
I'm thinking about setting up a savigns account for my 15 month old daughter. I'm aware i should have done this a while ago, but finances were just too tight.
I was considering setting up a standing order of £10 a month to go into the account so that when she eventually turns 18 (or 21 haven't decided yet) she'll have a surprise bundle of savings (which i highly expect to be spent on a first car).
The problem is i get confused by all the jargon that goes with pickign a bank account. All i want is something that offers a decent rate of interest and will keep the money safe until i pass it over.
any help would be greatly appreciated!!!
I was considering setting up a standing order of £10 a month to go into the account so that when she eventually turns 18 (or 21 haven't decided yet) she'll have a surprise bundle of savings (which i highly expect to be spent on a first car).
The problem is i get confused by all the jargon that goes with pickign a bank account. All i want is something that offers a decent rate of interest and will keep the money safe until i pass it over.
any help would be greatly appreciated!!!
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Comments
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hi zerno,
I researched child savings account for my son around a year and a half ago, and I must admit I was quite disappointed at what I found to be available.
The best interest rates (at time of writing) for children's instant access accounts are:-
Northern Rock - Little Rock account - 3.00%
Chelsea Building Society - Ready Steady Save - 2%
Skipton Building Society - Leap Account - 1.8%
Yorkshire Building Society - One Day Account - 1.75%
One drawback to the above accounts for you may be that they don't appear to allow payments by standing order - you'd have to set up a separate account and sweep the savings into the child's account every few months. Children's accounts still seem to be in the dark ages.
However there are accounts like Halifax Children's regular saver, which do allow payment by standing order, and have a minimum monthly deposit of 10 pounds. Regular savers only tend to last for a year, so each year you'll have to check the best rates, and set up a new regular saver if necessary
Cheers
JJ0 -
I see you found the other thread.
The best initial way is to push the £10 monthly through a Halifax Children's Regular Saver (currently 6%) .......... then work out where you want to put the proceeds as they mature each 12 months ##?
But you really need to read this first :-
http://www.moneysavingexpert.com/savings/child-savings-tax-free
## - with the amount involved - consider? You put £10 monthly via the Saver account and it will be swept automatically into a Save4it account Halifax will open. At the end of the 1st year (proceeds £120 plus around £4 interest [make sure you file an R85 - it is not automatically assumed tax should not be deducted]) ..... move the £124'ish into wherever you fund the SO from. Then change the SO for the 1st payment of the new year to £100 (the monthly max). Then change it to £44 for the 2nd month (£24 left over from the previous year + 2 x monthly £10 you haven't made) ....... then back to £10 for the rest of the year?
That way you will have £244 going through the account in the 2nd year. Importantly you will have put £144 in very early ..... so that will earn 6% (assuming the rate stays that way ...... it's been up to 10% and hopefully they will hold the Children's account fairly high. But they do change from time to time and it's the rate in force when you make the 1st payment that fixes it for the rest of the year) for most of the year. Interest just over £11 at the end of the 2nd year (- so it's starting to compound).
Then move the £255 ....... and consider re-cycling it (£100 Month 1 / £100 Month 2 / £85 Month 3 (balance of £55 from previous year + 3 x £10 monthly payments) back through the Saver again ............ unless they've downgraded the rates or someone's come up with something better. But - on current values and mainly utilising 'new money' - you're not going to do better than a Regular Saver such as this one.If you want to test the depth of the water .........don't use both feet !0 -
JustJewels wrote: »Regular savers only tend to last for a year, so each year you'll have to check the best rates, and set up a new regular saver if necessary
The Halifax one (both adult and Children's) simply continues, provided you keep paying ............ you need to do nothing other than maintain the SO.If you want to test the depth of the water .........don't use both feet !0 -
Hi Mike,sorry to butt in but does that mean the halifax account carrys on but at a lower rate than 6%.0
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Hi Mike,sorry to butt in but does that mean the halifax account carrys on but at a lower rate than 6%.
No - it carries on at their advertised rate on the day you make your first payment (or the first payment of a new year). And it's then fixed at that rate for the next 12 months (which can be a nuisance if they increase the rate).
Haven't kept track of it faithfully ...... but I think 6% is the lowest it's been (at that rate since Apr 09). Bit of the T&Cs here :-Maturity - after 12 months your savings and interest are simply transferred into a nominated savings account ( you'll be asked to open the nominated savings account at the same time as opening the Children's Regular Saver). You can continue to save in the Children's Regular Saver, at the rate of interest applicable at that timeIf you want to test the depth of the water .........don't use both feet !0 -
hmmm interesting. the plan to sweep into the standing order account is a good one, but i dont want to risk overspending in a month and takign away from here.
I was thinking would it be possible to open a child saver account with the halifax, use the years allowance at 6% and have the money swept into an account for her. The simply close the regular child saver and open a fresh one for her? Or would they not allow this?
The other option of course is to place it into an ISA, but i dont know very much about them...help would be appreciated!0 -
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We're in a similar predictament. Our daughter is 3 months old and we want to put money away each month by SO until she's about 13 or 14. She can have access to some at this point and then at 18 she'll get the rest. So we're happy for it to be locked away for 13 years.
The halifax regular saver is one that is tempting but the term is only 12 months then you need to move it elsewhere and start again, so the interest you accrue in not massive.
I noticed this account can anybody advise if this actually better. http://www.nandp.co.uk/savings/regular-savings/family-regular-saver/0 -
In regards to an ISA i could simply start it in my name, pay in regularly by direct debit and then transfer it into a bank accoutn for her when she turns 18. I dont know if this works out favourably in comparison to just the opening of a child saver account?0
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