Use your child - best child savings account

2.4children

I have a 4 month old child who has recently been given £10K by grandparents. This money is meant to be used for school fees etc.

I have been trying to work out the best way - or most efficient! - way to save this money as all interest accrued should be tax free.

However, I also need full access to the account so that we can use it when the time comes.

The whole process of setting up childrens accounts seems to be a bit of a nightmare and so I am thinking it might just be easier for me to set up an adults account and take the hit on the tax? Am I mad?

Froggitt

Set up account for kid with you as the second named person, and complete an R85 to get tax paid gross. Also get letter from GP to say the money came from them and file it away for when the rates go up and the interest exceeds £100 p.a. and they investigate you.

2.4children

Thanks for your reply - which is much appreciated. The problem I still have is which account to go for. High Street names have low rates - so to get a top rate you have to go for somewhereyouhaveneverheardof Building Society!

rb10

Halifax normally has good rates on kids accounts. You would, however, have to split the £10k into two accounts, and each account would have to have a different title. So you could have one where Mr 2.4children is trustee, another where Mrs 2.4children is trustee (and a third where Mr & Mrs 2.4children are both trustees if your child gets more money).

codym

Hi there,

Does anybody know the best childrens accounts for the Republic of Ireland?

Many thanks

GAILEY

Quick query - I want to save for my daughter and use her tax free status efficiently.
I have read Martins article and note that any interest over £100 is treated as parent's and taxed, but not if from non parent.
Is the interest of £100 from the investment of sums by each parent or from both parents??

Lokolo

GAILEY wrote: »

Quick query - I want to save for my daughter and use her tax free status efficiently.
I have read Martins article and note that any interest over £100 is treated as parent's and taxed, but not if from non parent.
Is the interest of £100 from the investment of sums by each parent or from both parents??

Both. So the child has £100 tax free interest from all of mummys and daddys money.

***xyz***

Since our two children were born, we have saved £50 child benefit per month for them into their own Building Society Accounts. They are 7 and 5 and have approx £6000 and £4000 respectively. The interest on these accounts now generates over £100 per year. Is this wrong for us to be saving this way for them? Would the Building Society automatically sort out the tax if we need to be paying more?

Lokolo

Its not wrong no. Not sure who sorts the tax issue out though.

annwilliams

My daughter already has a Halifax Regular Saving Account paying 8% interest, which matured in March. I read on your site that any child can have more than one account, quote "Any adult can open this in trust for any given child i.e. if Mum, Dad, Uncle Jack, Aunty Jill or even Dave from down the pub, so little Jonny could have five of these 8% AER paying accounts" So I set up another account with her Nana as the main account holder, however, today I have received a letter from the Halifax saying they cannot open the account as she already has one open and Account Regulations state you may only have one Children's regular saver in trust for each child. Can you please clarify before I get back onto the Halifax...

Thanks

Ann