Use your child - best child savings account

blibblob74

I've been looking at this recently as I'm saving regularly on behalf of my kids.

The Childrens Bonus Bonds are currently paying 2.3% fixed for 5 years (this includes the end of term bonus). Paying the top-ups into the CTF accounts seems like an idea if they are decent rates.

The £1900 thing is OK for one year - but in year two the pot becomes £2000 and will start attracting that tax - and I understand it is on the whole amount, not just anything over £100.

lambchop0905

I know this is going to sound really stupid but I am really confused over the £1,900 thing...

Where is this limit from?

I've got £7,500 to invest for my child and was planning to do £3,000 in NS&I Bond, and £4,400 in YBS with interest of 2.24% (interest of £98ish - therefore under the £100) BUT what is the £1,900 rule

Thanks for any help/clarification

Froggitt

What £1,900 rule?

Also as above poster states, accumulated interest will take child over the £100 and it will get treated as interest derived from you.

But, nothing to stop Mrs Chop giving half the money to the little lamb......with curent interest rates, it will take a decade before the £50 a year becomes £100 a year.

Presuambly the NSI bond is tax free?

surreydad

Following Martin's article which stated that more than £100 could be saved into these accounts if you opened accounts under different nominated adults, I went into the East Grinstead branch of Halifax to enquire about doing just that. Their response was even if you have multiple adults opening accounts for a single child, the maximum allowable contribution once added together across all the accounts is still only £100 for that child. Who is right?

Bogden

surreydad wrote: »

Their response was even if you have multiple adults opening accounts for a single child, the maximum allowable contribution once added together across all the accounts is still only £100 for that child. Who is right?

There's nothing in the T&Cs that says that. My wife and I each pay £100 a month into separate accounts in my daughter's name and there has never been any suggestion that we shouldn't do this.

phoebe03cat

I'm really confused about this. My daughter is now 16 and has around £7500 ina child account at nationwide -paying no tax. Money has all come from gifts from rellies over the years. What's the implications if dh, self, brother and her over 18 sister all opened Halifax 8% accounts and drip fed in the monthly max, steadily emptying her account where the money is at the moment?
All other suggestions welcomed pls?

girlatplay

phoebe03cat wrote: »

I'm really confused about this. My daughter is now 16 and has around £7500 ina child account at nationwide -paying no tax. Money has all come from gifts from rellies over the years. What's the implications if dh, self, brother and her over 18 sister all opened Halifax 8% accounts and drip fed in the monthly max, steadily emptying her account where the money is at the moment?
All other suggestions welcomed pls?

Looking at the Halifax website it looks like a childrens regular saver 8% account can only be opened for a child up to the age of 16. It says that accounts can be continued after the age of 16 but it looks like you would already have to have opened it before age 16.

phoebe03cat

well I'd better get my skates on, thanks. Just over a couple of weeks to go so had rounded up. Does this look ok in theory then?

girlatplay

I've just had a quick glance at the account conditions and I can't see anything that says you can't do that but please note that I am not suggesting that you do it. Have a check at the Halifax or Bank of Scotland website to see what you think yourself.

Other than that, your daughter would be as well to look into a cash ISA. I know they are not paying great rates at the moment but it is something I think everyone should have!!!

nukebox

Hello,

Does anyone keep re-investing in these regular saver accounts for Children?

For example, with the Halifax 8% account:

Year1 - invest max £100/month = £1200 total investment.
That investment + interest gets moved into a Save4It account and earns interest.

Year2 - repeat, etc

How many times can we do that without crossing into the "£100 interest limit" for money from parents?

Thanks.