Use your child - best child savings account

robertbell_2

I don't know if this has been mentioned but the Save $It account has a limit of £5000, you cannot pay in cheques or cash above this value although for some reason bank transfers (family allowance for example) are still accepted and accumulate the balance.

My children are 4 and 18 months and have about £6k and £3k respectively. A good proportion of this is from birthdays and christmases but we have the family allowance paid straight to one save4it account and then transfer half to the other to keep it fair.

What would the tax position be and is there a better savings method for this level of savings (bearing in mind we cant pay any more in to our elder daughters account now)

Thanks

Bob

deefadog

Why don't you have the regular saver set up and have the family allowance paid into this like i do, i top it up with my own DD to make up £100 a month!which pays 10% then this is transfered into the save4it account?

If you have rached your limit on this account then transfer the cash to another high interest child savings account.

I am looking into this now as my above post

The best payer is Yorkshire Building Society's One Day account, which pays 5.45% on savings from £10 up to £500,000.

Looks like i'll be opening this account and transfer the balance from my save4it account!

Actually from january this has increased to - 5.70% AER

Just checked on moneysupermarket and there are better deals again, the BRADFORD & BINGLEY FirstSave is 5.75% ** Just been on their site and the rates are different, looks like they have not been updated in years!

I'll ring these when i get a chance and see what's what!

So any advice from anyone else?

wellskint

just out of interest deefadog, if u payd in £100 per month for 12 months, what interest was added ??

deefadog

£64ish from the online statement

Shearer

Hi, I hope I'm on the right thread here. I've got three Smart2Save accounts at Nationwide, one for each of my kids (aged 3,10,12). The IR advised me recently that if total interest exceeded £100 per child, both me and my wife are each taxed on the full amount of interest in that particular tax year. In year to April 2006 we crept over this threshhold, so will creep even further over it in year to April 2007. We fund the childrens' accounts by transferring £25 per child per month from our joint current account into their savings accounts. Current interest rates on the Smart2Save accounts are 5.55%.

Gifts from relatives, friends, grandparents, etc, are out, so is there a more efficient, but relatively low-risk, way to save for the kids ?

Any advice would be very much appreciated. Thanks a lot.

Shearer

deefadog

I am unsure about this, i would like the answer aswell, but i would have thought the tax only applies to interest above the £100, so if your interest for child one was £125 for the year then £25 is taxed.

Can anyone shead some light on this?

Froggitt

Nope its the whole lot.

National savings?

Penny_Farthing_2

Hi
I hope this is a good place to ask this question. I'm financially stoopid (but ask me anything you like about gardening and spelling!) so trying to wade through the article and this thread has left me feeling faintly nauseous. Can someone please advise me.

On an IFA's advice, my DH and I have been paying £25 each into a Children's Mutual thing for 2 of our 3 children.
When I spoke to the Childrens Mutual we'd paid in £1975 with a further £1650 to go for a total of £3625 paid in by us.
If we make the remaining payments the plan would be worth at least £3171
They estimate at the moment that we'd get £3377.09 if we made all the payments
If we cancel today we get £1980.

This sounds like pants to me and we may as well have kept it under the mattress.

My children are 12 and 11. Should we ditch this 'investment' and follow Martin's advice about the savings accounts. We could open 3 as we have a 6 year old too.

Thanks

deefadog

Nope its the whole lot.

National savings?

What a con! O well, what's the difference with NS then, has this different tax rules to children's current accounts?

Froggitt

I thought so when I posted but now Im not so sure. It was to do with the returns from some types of bonds being tax free.