Use your child - best child savings account

Froggitt

robatwork wrote: »

"As you know, to open one of our Smart Limited Access accounts you must hold an existing Nationwide account to apply online."

What about applying in branch?

Darceydo

My 3.5 year old daughter is due to receive a lump sum of £20,000 from her living Grandmother. What are the best options to save this money long term? It will likely be used for school/ university or first home.

xylophone

Is the money a direct gift to your daughter, for her use only and to be used as she wishes once she is of age?

If so, then using the money for school fees does not seem appropriate?

If she has a CTF, it would be possible to make the full contribution to it now (assuming this has not already been done) then transfer it to a JISA and make the full contribution for this tax year.

The balance could be held in bare trust in a child account and gradually transferred to the JISA over the next few years.

You will need to decide whether to remain in cash or to use some stock market investments as well.

http://www.moneysavingexpert.com/savings/child-savings-tax-free

https://www.gov.uk/child-trust-funds/overview

gavcooper

To confirm the £100 rule applies to income earned each year for one child from one parent. So two parents can deposit for one child, making a total of £200 interest.

What happens after year one when interest is added to the initial deposits from the parents, which then increases the total balance and the interest payments go over the £100 limit in year two?

Froggitt

1) Yes
2) It becomes taxable as parents income. Also watch out for interest rate to go up as this will tip you over £100. Either withdraw the interest for your child, rather than let it compound, or put in a smaller amount of capital so that it only produces say £90 of interest in year one, leaving room for growth.

gavcooper

Froggitt, thank you for confirming my thoughts.

sallyjay

I'm looking for the best accounts for my children's savings. All three have £11 500
My 17 year old has the help to buy ISA but I would like to put his money into an account paying a good rate of interest which then feeds into the ISA as you can only put a certain amount per month into the ISA.

Also which would be the best account for my other two who are 14 and 9? They will not need to make any withdrawals.

Thank you.

eskbanker

See http://www.moneysavingexpert.com/savings/child-savings-tax-free

xylophone

Does your 14 year old have a JISA?

Presumably your 9 year old has a CTF? See https://forums.moneysavingexpert.com/discussion/comment/70479762#Comment_70479762

Dinah93

Struggling a little to find a suitable account for our children, we would like something we can manage online, no fines for withdrawals (happy for them to be limited to say 3 a year), available from age 2, minimum opening balance of no more than £100 and preferably with 2%+ interest - can't find anything in the guide that meets these requirements - does anyone know of anything?