Childrens savings account sdvice
carol7
Posts: 22 Forumite
I am looking for advice on which account to open for our granddaughter. She is 11 years old and I am wanting to set up an account that I will have control of. We will be depositing 10,000 per year and I do not envisage needing any withdrawals for the first 3 years. She already has a child trust fund administered by her parents so I understand that she cannot also have an ISA.
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Comments
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That's a very generous contribution that will quickly exhaust most of the usual children's regular savers (Halifax 4% £100/mo, Saffron BS ditto, Barclays 3.5% £100/mo, Nationwide ditto with compulsory current account).
HSBC's 3% easy access savings are the next best option but the rate drops after £3000 balance.
Then Santander's Mini 123 which pays 3% on balances up to £2000 - but with the adult 123 looking in line for a rate drop you may have to act fast to get this.
Nationwide's Smart Limited Access is 2.5% on balances up to £50,000 which would certainly sort you out for a few years.
NS&I do a 5-year Children's Bond, also paying 2.5% but only holds £3000.
A real shame your granddaughter can't have a Stocks and Shares ISA as this may well be the most profitable option.: )0 -
If you are giving the money to your granddaughter, then it can be held in bare trust until she is 18 (16 in Scotland) but she has the absolute legal right to access and control at that age.
Income arising on the capital will be taxed on her - she has the same personal allowance as an adult.
See https://www.gov.uk/savings-for-children
If you wish to keep control of the money beyond the age of 18, you will need to set up a discretionary trust - if you do this, it will be as well to take qualified legal advice - you should be aware that the tax treatment can be quite complex.
https://www.gov.uk/trusts-taxes/types-of-trust0
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