Use your child - best child savings account

luckycurly

Hi which is the best account available for for investing £2000 for 5 years for 11 & 13 yr olds (fixed 5yr term & no access req.) ns&i Index-linked Savings Certificates look ok please advise thankyou cj

cue

luckycurly wrote: »

Hi which is the best account available for for investing £2000 for 5 years for 11 & 13 yr olds (fixed 5yr term & no access req.) ns&i Index-linked Savings Certificates look ok please advise thankyou cj

I'd assume a 5yr ISA unless i'm advised otherwise....

floppy1996

Hi All,

I need advice on tax and childrens' savings.

I have been saving for my child since birth and have always kept it as savings in my name as I do not pay tax as I don't earn enough.

I have been looking at Northern Rock's Little Rock Bond paying 5% per annum gross.

I have read on Martin's page that if a parent gives a child a gift of money that generates more than £100 in interest (income) per year, that the income will be taxed at the rate of the parent who gave the gift. The interest/income on my child's saving will be more than £100 per year. So...

What's confusing me is, will my child's interest/income be taxed or not, seeing as I don't earn enough myself to be a tax-payer? Or will the interest/income be taxed at my theoretical tax rate - as if I did earn enough to pay tax?

Hope this doesn't sound like a stupid question.

Thanks

Reaper

It is taxed as if it is your income, so it will be tax free if it stays under your annual allowances.

floppy1996

Hi Reaper,

Thanks very much for your sound answer.

Repeat3Times

I'm looking at Northern Rock's "Little Rock Fixed Rate Bond issue 2" for a 1 year-old, and while the rate and term look reasonable, I'm confused by some of the wording.

The NR website states that I should apply quickly as this issue is strictly limited and may be withdrawn at any time. Elsewhere it states that, "As these are limited issues, once the issues are withdrawn no further deposits will be accepted".

So if this issue is withdrawn the day after I open it, I would not be allowed to add money to it for the rest of its 3 year term - am I right in my understanding of this?

I'm investigating this for a relative and one of her stipulations is that she will want others to be able to add to her son's savings when they want to. Should I look elsewhere?

Thanks in advance.

Reaper

You are correct in your understanding. As a rule of thumb fixed rate, fixed term savings accounts are open only briefly. When they shut both new and existing savers are unable to save any more.

martinman3

Repeat3Times wrote: »

I'm investigating this for a relative and one of her stipulations is that she will want others to be able to add to her son's savings when they want to. Should I look elsewhere?

You should look at the Little Rock Instant Access instead.
http://www.northernrock.co.uk/savings/branch-and-postal-accounts/little-rock-instant-access/

sootyvrs

Please can someone help.

We have been putting £40 a month savings for our son for the last 10 years into a saving plan (Worth £5200) so I calculate it has only earned around £400 interest in 10 years which I assume is not that great.

We want to now invest this and keep paying £40 per month for another 10 years so there is no need to withdraw any cash.

Can someone please advise the best thing to do as I believe it's taxable on interest over £100 per year?

Repeat3Times

martinman3 wrote: »

You should look at the Little Rock Instant Access instead.
http://www.northernrock.co.uk/savings/branch-and-postal-accounts/little-rock-instant-access/

Thanks! I had seen this one, but disregarded it because I wrongly assumed that there were no branches in Scotland. This will be in the recommended list.