Use your child - best child savings account

fernando_vaz

Hi All

I would like to open a savings account for my neice. I will be putting in around £100 a year. I would like to hand the account over to her when she is around 18-20.

Please could anyone advise which account would be best, thinking in mind that I am looking to keep this account for the next 20 years, rather than move the money from account to acount depending on the best deals.


Thanks

Froggitt

Try Harpenden.....no withdrawals until 18, and decent rates for kid account over past history.

Scaramanga_Yorkshire

Hi,

Being a new & first time parent, I have a couple of possibly simple questions to ask:

I'm thinking of opening a savings account (perhaps Yorkshire Building Society's One Day account) for my daughter. The account will be in my name as a trustee & will make regular payments. I understand that the account is an instant access account. Who does the money belong to? My daughter or me. It's not beyond the realms of possibility that I will need to take some money out at any given point. Would I be able to do so? Or if the money is my daughters, I guess I wont be able to make a withdrawal.

Plus do I need to complete a tax form R85?

Thanks for any assitance.

JustJewels

Hi Scaramanga_Yorkshire,

I opened a YBS One Day account for my little one (who's only 6 months old). I am his trustee, which means that although the money is 'to benefit the child', I am actually the one in control of the money, so my signature is required for withdrawals etc. (LOL at my own mental picture of baby making messy thumbprint & dribble in branch to get his hands on money, which he would spend on In The night Garden DVD's, if he had a choice!)

Which is good that I am in control, because I will be withdrawing the money I deposited in the Yorkshire, so that I can fund the Halifax Childrens Regular Saver, which pays fixed rate 10% at time of writing! (but max £100 per month, boo!)

I also completed form R85 for both accounts - they're not going to earn more than the £100 yearly interest limit, so why not. Better in my pocket than the tax mans.

I have been researching this, and although children/babies do get an annual tax allowance like everyone else, there's virtually no way for them to earn money themselves...if I give my baby my savings, any interest over £100 gets taxed at my tax rate...the only loophole is if (non parental) relatives (i.e. auntie, uncle, gran) open the account in trust, then all interest is tax free.

Hope that helps ;-)

JJ

joyciebabe67

I have a child trust fund for my youngest child but my older two are too old to qualify. What type of account is the next best thing for long term saving for them?

vk2003

Can anyone suggest the best account for my son. He is 6 weeks old, and has a £5000 lump sum from grandparents. We wish to also save roughly £200/month for him too. This will all be towards school fees etc in the future. We probably won't need to access the money at any point, but would like to retain control such that if we do, it is not inaccessible.

Any suggestions?

TIA

fullstop

This site might be of some use to compare funds. .

http://www.myeggnest.com/

martinman3

vk2003 wrote: »

Can anyone suggest the best account for my son. He is 6 weeks old, and has a £5000 lump sum from grandparents. We wish to also save roughly £200/month for him too. This will all be towards school fees etc in the future. We probably won't need to access the money at any point, but would like to retain control such that if we do, it is not inaccessible.

Any suggestions?

TIA

If you decide against a Cash CTF you can instead put it in a fixed rate bond opened in trust for the child. I would suggest that it is opened by the grandparents as then you will have no future hassle from the taxman or, alternatively, if you need to claim benefits then this money would not be in your name. I would also recommend that the grandparents are joint account holders to make it easier for them to administer and don't forget the R85 form so that no tax is paid on the interest.

Rates have dropped but you can get 5% fixed until 2nd Jan 2012 from the Leeds BS http://www.leedsbuildingsociety.co.uk/savings/fixed_rate_bond_issue9.html

n.b. to open this account you will need to download the under-18 application form here

fullstop

fullstop wrote: »

This site might be of some use to compare funds. .

http://www.myeggnest.com/

Just listened to the web chat on the site , I did not realise that as well as getting £250.00 at birth, the child also gets another £250.00 when they reach 7 years old.

mongeese

Hi,

I have a question re: parental tax limit and could not find the answer.

I have 2 children and put aside the child benefit received for them. is this classed as my money or theirs for tax purposes?