Savings bonds for 16 and 17 year olds
Paperweight
Posts: 92 Forumite
I am trying to open a savings bond account for my two daughters aged 16 and 17 and cannot believe how difficult it has been. They each have £1700 to invest and we decided to go for the Post Office 2 year bond paying 3.75%. However, they will only accept the money in one of 4 ways:
1) Cash: however maximum is £1,000 so no good.
2) Cheque: however must be their own cheque from their own account and as 16 and 17 year olds they do not have cheque accounts.
3) A cheque drawn from their bank and made out to them; however there is a £12 charge from the bank for this which wipes out 20% of their first years interest
4) Transfer funds from a PO savings account; however all of the above problems exist for this account too and it takes 2 weeks to open it anyway.
Should it be this difficult. Is it the same with all savings accounts whoever the account is with?
1) Cash: however maximum is £1,000 so no good.
2) Cheque: however must be their own cheque from their own account and as 16 and 17 year olds they do not have cheque accounts.
3) A cheque drawn from their bank and made out to them; however there is a £12 charge from the bank for this which wipes out 20% of their first years interest
4) Transfer funds from a PO savings account; however all of the above problems exist for this account too and it takes 2 weeks to open it anyway.
Should it be this difficult. Is it the same with all savings accounts whoever the account is with?
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Comments
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Try Allied Irish at 3.9% and see whether they will accept a cheque from you? Don't forget the girls must each sign the R85. http://www.moneysupermarket.com/savings/fixed-rate-bonds/?source=GOO-1317600C&p=0&keywords=two+year+savings+bondsPhrase&ef_id=zg29z9B6MjYAADLkFkwAAAAP:20120208170813:s
Otherwise, you might have to open 'Re" accounts for each (if the institution allows) but this means that you would have to go to the trouble of a tax reclaim. http://www.hmrc.gov.uk/tdsi/children.htm0 -
Thanks for responding Xylophone. Unfortunately though, i just rang Allied Irish and they cannot open an account for anyone under 18. Why is this so difficult?0
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Just do it for £1,000 in cash and put the other £700 somewhere else.:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
Again, not sure if suitable, but you could try FirstSave 4% for two years ....(MSE best buy)......just opened mine.
Their customer service seems quite good so far ... give them a call?0 -
Thanks everyone.
First Save need you to be over 18.
Putting £1000 into PO and £700 elsewhere just brings up the same problems in terms of finding somewhere else for the £700.
Finally decided to go with Halifax although even this means making a Branch appointment and the nearest branch is 10 miles away. Making an appointment during banking hours that needs me and three teenage children all to be free at the same time wasn't that easy either although because next week is half term week we have managed to find a time. Who would have thought it would be so difficult?
For information, Halifax have no issue accepting a cheque from me to open the accounts. They cannot understand why the PO insist that the money comes from the childrens' own accounts (with all the problems that causes listed above). They say it certainly isn't anything to do with money laundering laws.
Ah well: got there in the end!0 -
nearlyretired2004 wrote: »Again, not sure if suitable, but you could try FirstSave 4% for two years ....(MSE best buy)......just opened mine.
Their customer service seems quite good so far ... give them a call?
First Save also say 18 or over but if they allowed a "re" account,(parent as Trustee in this case), then clearly the parent meets the age criterion. The drawback is that the parent trustee then has to apply for a tax refund (assuming of course that the girls are not liable to basic rate tax).
Would a two year ISA be easier to open?http://www.moneysupermarket.com/savings/search-all/?enquiryId=33927240 -
Hi xylophone: not sure about this (you may know better) but I thought that you could only open a "re" account for someone if they were a child (i.e. under 16) or had learning difficulties.0
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No, you can do it for an under 18, as far as I understand it - it is just that if the account is held in trust for an over 16 you cannot complete the R85 - you have to make a formal reclaim of the tax.
http://www.hmrc.gov.uk/tdsi/children.htm
Incidentally, perhaps your girls could open one of these and get a cheque book.
http://www.fairinvestment.co.uk/barclays_young_persons_account.aspx
And see http://forums.moneysavingexpert.com/showthread.php?t=3769065 post 110
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