Childrens Savings Advice Sought

Fordy5 · 29 August 2007 at 3:22AM

I'm looking to maximise my childrens savings and am seeking some advice.

My daughter has a Monthly Saver account with Halifax in her name. The balance is £3500, £50 is paid in a month, the account pays 3.80% but there is a bonus as well (dependant on withdrawals, none made, a total of £149 was added to the balance last year.

I've read another MSE article about a Childrens Regular Saver account, also through Halifax, paying 10% (for 1 year, on the average balance) although there are certain conditions - max of £100 per month/£1200 total per year can be saved. However, it is possible to have multiple accounts. I was wondering whether it was worth clsoing the existing account, transferring the balance to a high interest savings account - possibly an ISA - and then opening 3 of these Childrens accounts and then transferring the maximum £100 a month into each of them from the new savings account. Would going down this route earn a higher return - interest accrued on 3 Childrens accounts & the diminishing balance other savings account ? Are there other alternatives worth considering. Any guidance much appreciated.

maple41 · 29 August 2007 at 9:04AM

We did that, but don't bother with the ISA bit. You can't have an ISA a/c under 16 or in joint i.e. parent in trust for the child names. You just need to look around for a high interest a/c that allows immediate cash withdrawals. Suggest that you also look for one with a branch / cash point close to the Halifax then you can withdraw the cash and pay into the Halifax with minimum delay each month with minimum loss of interest. You now need to find 2 other people to open accounts for your daughter - grandparents, aunt, uncle as you can only have 1 account each for each child. You can of course hold all the books and make the payments.
I must admit it does seem a bit of an effort, but believe me it is worth it in the end, when they reach 16 and you have a lump sum for them. Just be aware, DON'T close your Halifax regular saver until you get the bonus this year (aniversary date of opening the account) otherwise you will have lost out on the bonus and will only get the 3.8%.

sarahches · 29 August 2007 at 4:20PM

My mum always said spread your money about.

Agree no point having an ISA as children don't tend to pay tax.

I moved the bulk of my daughters savings to the Harpenden BS 18+ account. Simply you can put in but can't take anything out till the child is 18 and there is a follow on account for upto 21 years old.
I've had great service - posy cheques and passbook and they get paid in and book returned within a couple of days.

Not sure if it's best rate but has worked for me - just remember to fill in the R85 for each account so no tax is paid.

baby_boomer · 29 August 2007 at 5:09PM

Harpenden is OK.

The money is tied up but the account has a guarantee to pay at least the Harpenden's best rate, so there's not too much room for funny business in spite of the tie in.

regularsaver1 · 29 August 2007 at 8:09PM

Remember your daughter is receiving 6.55% gross (this is the rate with the bonus on the young monthly saver) on the whole £3500

As maple says, to have more than one childs regular saver, different family members need to open the account in trust for her (all taking a copy of birth certificate). After the year the money has to go into the Save4it account

I just don't think its worth it for this, as will you open an isa in your name and take the money out each month, as you can't have standing orders on an isa and the money to the regular saver should come from a bank account, it can not be paid over the counter (monthly saver can in addition to a standing order)

Childrens Savings Advice Sought

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