Use your child - best child savings account

johnllew

The other thing to check out is you can use National Savings Childrens bonds in addition for tax free savings that don't impact these limits.

Martin

From 1st November 2004, the maximum you can invest in Children's Bonus Bonds has been increased from £1000 to £3000. CBBs currently pay 4.45% tax free compounded when held for 5 years.

lucidamike

Furness Building Society young saver account paying 5.25% gross on accounts over £500

Robert_Sterling_3

wrote:

would it still be possible if I needed to move the money to another provider in the event of a better offer coming on stream.

Yes you could.

old_owl_2

I believe I heard u on radio 2 say that u could save a specific amount per month for your child and claim tax relief, my daughter is 16 going to college and hopefully uni can I contribute throu this time and do I just tell the taxman and get an improvement on my tax code. thanx

Froggitt

£100 rule question......I know that each parent can give capital to kids such that it produces less thsn £100 and is classed as the kids interest......what about when the compounded interest (ie money/interest given to the child by the Building Society) starts producing interest......does that count as money given to the child by the parent or by someone else?

a_hare

I have received the honour of becoming the godparent of a close friends son.

I would like to save some money for my godson for when he is older (or indeed in the event of something happening to either/both parents).

I'm unsure how best to invest the money, or where to start. I have read with interest your articles on investing money for your own children tax-efficiently. I would be interested in any advice in investing money for a godchild?

Many thanks in advance.

Curry_Queen

With regard to a child paying tax on any interest over £100, what is the situation if a parent is actually exempt from paying tax on their own interest (i.e. on benefits)?

Also, would the usual savings limits that affect benefit rates be applied if those savings are actually generated from benefit income over a period of time?

jellyhead

the way i read it (but i could be wrong lol!) is that if the child gets more than £100 in interest they tax the rest at the rate at which the parent is taxed, so if you're not paying tax yourself it would count as part of your tax allowance for the year.

i found the article today because i was curious about using my child's bank account for short term gain. i took out a loan but won't be using the bulk of it for a couple of months yet. i bank online and my childs account is part of my portfolio. i regularly transfer in and out of his account online, i put his pocket money in every month, take it out when he spends it, when he's given money by relatives or for birthdays etc. he sometimes pays it in himself but more often i will spend it then transfer an equivalent amount from my account to his etc. etc. and i also let him have the interest the account earns. his account earns more interest than any of my accounts, so i'm also putting a chunk of my monthly salary into his account, spending on my cashback credit card and then transferring my salary back into my own account in time for the credit card to take their direct debit in full. so not only am i gaining cashback on my monthly spending, i'm putting the money into his account for 2 or 3 weeks each time so he gains interest on it. no point leaving it sitting in my account with its piddling interest rate.

anyway, i put my loan into his account and in april he earned more than £100 in interest, all of it was tax free. we got the statement today saying he'd earned over a hundred in interest during the tax year and had paid no tax. this loan was transferred from my account into his, so how come the interest isn't taxable? i'm a stay at home mum so my interest isn't taxed either, i didn't earn up to my tax threshold last year, i only worked part time.

is there anything wrong with what i'm doing - using his account as a high interest account?

Viz_2

Maybe if the taxman finds out your childs interest is over £100 they will ask for the difference in tax then ?

I'm in a similar situation. I am also a higher rate tax payer so i;m going to transfer a chunk of our baby's savings into a National Savings bond. The interest on these are tax free.
This will also enable me to carry on putting in a regular amount into childs account with-out going over the £100 in interest limit, for now anyway !

payless

Not sure if mentioned already
Co-op Bank Childrens' Bonus ACcount
only 4% interest but those aged 13-18 get £10pa bonus on top
if ave balance is at laest £50
( thats equal to upto 20% )