Use your child - best child savings account

Mammy_of_2_yr_old_twins

Hi, can anyone advise please? My daughters have inherited £1000 each from their great grandfather, it is currently in a LLoyds account - just so that I could cash the solicitors cheque made out to them. Where should I move this to see get the best rate of interest for them?

Elliecat

My 13 yr old has inherited nearly £19K I am after some advise on what to do with it. As it is not from either parent and is already in her own bank account I presume it will be tax free? thanks

welshmoneylover

Elliecat, please make sure a R85 form has been filled in and returned to the tax office otherwise they will take 20% tax from the interest.

rb10

welshmoneylover wrote: »

Elliecat, please make sure a R85 form has been filled in and returned to the tax office otherwise they will take 20% tax from the interest.

No- - the declaration to receive tax-free interest must be given to the bank, not the tax office.

iseethestrals

rb10 wrote: »

The rate won't necessarily go down in 12 months.

The way the account works is this:

(1) You pay in between £10 and £100 every month by standing order.
(2) A year after the first deposit reached the account, it matures. At this time:

(a) all the money that's been saved, plus the interest earnt, is moved into a Save4It account. If you don't need instant access to this money, then I'd move it across to a Guaranteed Reserve, which pays a higher rate; and
(b) a new interest rate is set for the Children's Regular Saver. This will be whatever the account is paying for new applicants on this day. Previously it's been much higher than it is now - it was 10% for a very long time - but there's no knowing what it'll be in a year.

(3) You choose whether let the standing order continue (in which case you return to Step (1)), or to stop the standing order (then the account will close).

So just to get my head round this. I've just finished 12 months paying into the account, the money i've saved plus the interest will be moved to a save4it account, and because I dont need instant access I should move it to a guaranteed reserve account. I think I was gettin 8% for the last year.
If I continue with my regular payments, the next year will now be at 6% which is still higher than elsewhere. and the money saved this year will also be earning interest

welshmoneylover

rb10 wrote: »

No- - the declaration to receive tax-free interest must be given to the bank, not the tax office.

I didn't know that! My DD has 20% taken off the gross interest from her halifax child's saver account, they're sorting it out for me.

rb10

iseethestrals wrote: »

So just to get my head round this. I've just finished 12 months paying into the account, the money i've saved plus the interest will be moved to a save4it account, and because I dont need instant access I should move it to a guaranteed reserve account. I think I was gettin 8% for the last year.
If I continue with my regular payments, the next year will now be at 6% which is still higher than elsewhere. and the money saved this year will also be earning interest

That is correct.

If you can find an account elsewhere that accepts applications from children and has a higher rate than the Guaranteed Reserve, then you could open that instead, but most places seem to have a minimum age limit that excludes children from opening accounts. (The Guaranteed Reserve has a minimum age of 0.)

ngd

Hi

Im just looking for some advice, I am looking to open an account for my young son, we have about £600 to start it off and would then like to pay money in, ideally I was looking for a long term (at least 3 years) fixed rate account but all the interest rates dont seem to be as good, and have restrictions, does anyone know of any good ones, the one we were looking at & got forms for closed last week.

Thankyou

JustJewels

Hi ngd

Halifax Guaranteed Reserve accounts can be opened for children, minimum deposit 500 pounds, and interest rate depends upon term, so 6 months gets you 1.2% AER, 1 year terms is 2.45% AER, 2 years is 3.55% and 3 years is 4% AER.

Or if you prefer the "deposit it and forget it" account, there's Clydesdale Bank, 4.75% AER for 5 years, minimum 50 pounds...

Bath Building Society pay a tasty 5% on their Futurebuilder children's account r...but beware, that rate is only for a maximum of 500 pounds - if the balance goes to 500.01 then the interest rate drops to 1.10%...sneaky blighters...but if you get the interest paid to another account, and just leave 500 in, that would be a good rate.

As far as I know, fixed rate accounts don't usually allow extra payments in once set up, but there's nothing to stop you setting up a fixed rate account with the 600 and running another regular saver at the same time.

Hope that helps

JJ

Mammy_of_2_yr_old_twins

Hi

Does anyone have any thoughts on the NS&I childrens bonus bonds or/and index linked savings certificates?

Thanks