Use your child - best child savings account

emmaegardner

I'm sorry for being a bit thick, but what kind of account allows you to do this? Would our son not auto matically have access to the account once he turns 18?

Reaper

What you need is to set it up "in trust". Normally trusts finish on the child's 18th birthday but I believe it is possible to delay that anywhere up to age 25.

I'm not up to date on trust rules which have changed since I last looked at them, but try searching on "age 18 to 25 trust" for starters.

emmaegardner

Thank you for the information. Unfortunately, everything that I can find relates to inheritance tax on trusts for bereaved minors. Is it really so unusual to want to create a savings account that is payable when your child is older than 18?

Reaper

Try this site:
http://www.myeggnest.com/info/trusts.aspx

The main choices are a "bare" (aka "simple") trust or a "discretionary trust". Bare trusts are the simplest and can usually be set up by the bank/building society when opening a savings account.

However you may need to opt for a discretionary trust which is more flexible. For that you will probably have to involve a solicitor.

belmont_118

First of all, the article says that "ANY adult can open 1 account in trust for any given child under 16 ". Does this mean one account per type of bank account or one account per banking establishment, or is it literally just one bank account.

The second question is, does this apply to any account available or can the bank restrict this. The reason for asking is that the T&C on the Principality web site says "One account permitted per eligible child"?

The reason for asking is that our 16 month old daughter has some very generous grandparents. Currently the money is sitting in our bank accounts, but I want to transfer it into accounts under her name. To maximise the benefits of the Halifax and Principality accounts I was considering opening 3 accounts in each, one in the name of our daugher, one in my name in trust and one in my partners name in trust.

Evidently if you can only hold one account in trust, then this isn't possible. Equally if Principality do restrict the number of accounts that can be opened, then this also restricts potential options.

Thanks for the advice.

michaelbyng

Looked at your site for best childrens savings, I have 2 lump sums of £20K to invest for 2 kids, capital not required for 6-7 years, what is the best option/account I could look at. THANKS

Spiggle

Hi and thanks,

I have been saving £10 per month (I have increased the monthly amount occasionally but back at £10 now) as a trustee for my 7 year old granddaughter for the last three years with Halifax Children's Regular Saver (my how the rates have fallen - was 12% when I started and next will be 6%!). I (we) hold a linked Save4It (currently 1.05% interest) account into which the saving funds have been swept on maturity each year. (Relevant tax forms have been completed so no tax deducted)

With the maturity of this years account I reckon there will be around £400ish in there. (Makes me feel very stingy when I see some of the amounts other GPs are saving for their GC but its all I can afford and another GC arrives later this month!). I fully intend to continue with the Halifax CRS (can't find anything better) but want to maximise the return on the Save4It balance.

I used the link from the website to compare children's accounts and discovered the tiered Bath Building Society Future Builder which pays 5% on balances up to £500 and 1.10% (both variable) on balance above that. This seems an incredibly good deal especially as that's the rate on the Principality CRS and it's only 1% below the Halifax CRS. Even the second tier rate is higher than Save4it.

Being naturally sceptical and subscribing to if it looks too good to be true it probably is, does anyone know of any catches with this account please? Does my plan to move the accrued savings seem a good idea?

Secondly, when GC no.2 arrives she will benefit from the CTF payment of £250. Could this be put into the BBS Future Builder too? Or does it have to be put into a trust fund? My daughter is not very good with comparing savings/interest rates/benefits etc of accounts and so any advice would be more than welcomed.

I will also begin a Halifax CRS (assuming it remains the best buy) for GC no.2 and would similarly seek the best deal for the matured fund 12 months after opening.

Sorry this looks like war & peace and thank you in advance for any advice or observations.

Spiggle

only1sab

Q. How many child savings accounts can I open for my little one he is 6 months old?

I have 5k cash savings for him but its not gifts from anyone else I gather it will be taxed??? Sorry I'm a bit confused with how this whole thing works.

I currently have a 6% Halifax account saving £25 per month should i up this to the maximum £100 and deduct the payments from the 5k?

newkitchenfund

my children (age 10 and 14 so no Child trust fund options available) - both have several thousand pounds in savings, given to them by relatives (birthdays etc). The accounts they had were paying peanuts in interest so I decided to look elsewhere, only to find that almost none of the branded 'childrens' accounts pay anything like the best buys. So ... a quick phone call to the tax office, and it turns out that I can open ANY savings account (other than an ISA) in my name 'Re: (child's name)' and be eligible for tax free savings. PROVIDED the money is genuinely held on their behalf, wasn't given by me and I don't dip into it. Simple!

Another little loophole for you all - the Co-operative Bank offers a Bonus Account for children which pays a bonus for every year that the average balance is £50+. The bonus is just £2 (i.e. 4%) for age up to 12 but a fat £10 if age 13-16.(i.e. 20% !!!). There isn't much point in depositing more than the £50 as the actual interest rate is not competitive, but the bonus makes it definitely worthwhile.

Roberta1

Hello all. Hoping you can help with my situation.

My dd (10) has asked to open an account to start saving with. She currently has about £50 and I doubt the balance will ever go much beyond that.

We live in a rural area and the only options in our town for her to be able to walk there are Lloyds TSB and Natwest, both of whom offer very poor rates of interest.

So, can anyone advise me on the best postal accounts? I'm looking for good interest rates (so she can see it is worthwhile to save - tricky one at the moment!) and for ease of use, specifically how easy it is to withdraw small sums of money.

I'd be grateful for any advice you may have.
TIA.
Roberta