Best Online Children's Savings Account?

mattogier · 10 February 2008 at 3:37PM

Sorry if this info is available elsewhere - I have looked but can not find!

I am looking for a replacement for three kid's post office saings accounts as I am fed up with the (lack of) service that we get and they way the kids get huffed and puffed at for bringing in their penny's every week!

We live in a small village so on-line would be best so we can sit the kids down to see there savings grow! (we do our banking online so it wil be just like mom and dad!)

The kids are 6 (£250 saved), 10 (£450 saved) and 12 (£200 saved - she aint so good as the rest) - and we have incentivised saving by adding a further 25% of what they take from xmas, birthday and pocket money etc to save.

Any advice would be great - thanks.

tradetime · 10 February 2008 at 3:59PM

Not sure if thei is what you are looking for, but it's a start.

Doh!! Helps if I attach the link!!

http://www.halifax.co.uk/savings/childregularsaver.asp

martinman3 · 10 February 2008 at 5:15PM

I assume that you will be taking their cash from them and transferring the same amount by transfer into their accounts.

The problem with a regular saver is you must deposit a minimum each month but cannot deposit all your childs current savings in one go. As a result you cannot earn the 10% AER on the total sum you have to invest but only on the amount the account allows you to invest. And after a year the total is dumped into a below average account.

One of the best child accounts is the Yorkshire Building Society One Day account at 5.90% AER, it has no conditions or short-lived conditional bonuses. You would open each as trustee and they would operate until they turn 21. You would register for their online banking service which would enable you to view the accounts.

Don't forget the R85 forms to pay interest tax free.

Steve_xx · 10 February 2008 at 5:29PM

Be careful regarding the amount of money that you, as a parent gives to your children on any one tax year. You might find that there is a tax liablilty. Read all about it here:

http://www.hmrc.gov.uk/taxback/100pound.htm

Mikeyorks · 10 February 2008 at 9:56PM

martinman3 wrote: »

And after a year the total is dumped into a below average account.

That's not exactly true.

It's swept into a Sav4it account at 5.8%. So the combination effect of the 10% Regular Saver allied to the 5.8% account .....is not at all bad.

Mikeyorks · 10 February 2008 at 10:03PM

Steve_xx wrote: »

You might find that there is a tax liablilty.

That's unduly alarmist considering the OP cited values for each of the children!

There would have to be £2000 from (each) parent (at 5%) .... to each child ...before the £100 figure is reached. But that is cumulative not, as you suggest, per year.

martinman3 · 10 February 2008 at 11:27PM

Mikeyorks wrote: »

That's not exactly true.

It's swept into a Sav4it account at 5.8%. So the combination effect of the 10% Regular Saver allied to the 5.8% account .....is not at all bad.

My mistake, I edited at the last minute and the word 'below' should have been removed.:o

The truth is that with small initial sums and low monthly saving the difference between childs regular saver and normal childs account is small. I calculate that you get £9 more at end of year using reg.saver with an initial £450 split £100,£100,£100,£70,£10......£10 and that would involve effort changing standing orders/transfer amounts etc manually and having the initial sum in an account which supported transfers. If the child received £100 regularly each month then it would perform better but that seems unlikely to me (unless pocket money has increased significantly).

The adult regular saver though with higher limits is much better than a normal savings account if used as originally intended, that is the regular amount is taken from salary.

Mikeyorks · 11 February 2008 at 12:52AM

martinman3 wrote: »

The truth is that with small initial sums and low monthly saving the difference between childs regular saver and normal childs account is small.

Agree with you. If it's the children putting in small sums .... they may as well just make friends again at the local PO.

I got summonsed for my tea .. before I'd finished. Otherwise I'd have gone on to suggest the only practical way to use the Reg Savers is: That the parents empty the youngsters accounts in to theirs. Then fund each of the (3) Reg Savers with the max £100 for the first 2 / 4 / (nearly) 2 months, respectively - but retain sufficient to ensure they (+ the children's ongoing contributions) can make the minimum £10 monthly for the rest of the year. And add a small amount for the interest the youngsters have lost to the parent's account.

But it really is a bit of a performance doing that. In particular that you really have to repeat it annually (by then draining the Sav4it accounts - as you can't SO from them) .. to get best effect? As the ID requirements, from Halifax, are a bit onerous (from other threads on here) .. I know it's put some people off.

So they may be as well reconciling with the local PO or finding a children's account adjacent to where they Bank .. and simply dump the lot in and then push the childrens donations in via their own online facilities.

Steve_xx · 11 February 2008 at 1:05AM

Mikeyorks wrote: »

That's unduly alarmist considering the OP cited values for each of the children!

There would have to be £2000 from (each) parent (at 5%) .... to each child ...before the £100 figure is reached. But that is cumulative not, as you suggest, per year.

It's not unduly alarmist at all. It was merely advisory.

FiscalFanny · 11 February 2008 at 10:25AM

I've just opened a Halifax regular savers for both my kids as their money was languishing in NS&I bonus and premuim bonds and part in our obviously taxable e-savings account. So one child has £1200 so I can s/o £100 per month for 12 months and he'll get £60 interest that year. The other child will be drip fed £100 for 3 months then £30 Month 4 then £10 for 5 months. I can amend my SO online easily. So maximum amounts getting the 10% interest for as much of the year as possible.

When they get swept in the Save4it it will earn 5.85% which is there amongst the best payers. But being a good MSE girl, I'll review it again then.

My kids will be about £60 better off this year in interest, so is worth the hassle of swithcing and amending my SO online twice in one year.

alnorris · 12 March 2008 at 11:54AM

Hi everyone,

My mom passed away last year and has left £6k for my two children (£3k each). I want to invest it for them, but don't know where to start!

I was thinking of opening up a couple of ISA's for me & hubby to invest £3k each in for the children, but have been told that this would be a poor investment for them.

Unfortunately, I missed out on Child Trust Fund vouchers as they were both born before Sept 02 (didn't plan that very well, did we)!

Can anyone offer any suggestions as to where I should stick this money (polite answers only please)!!

Thanks,

Anne
x

Best Online Children's Savings Account?

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free