Use your child - best child savings account

sharp-spark

So for a couple, any interest above £200 is taxed at the parent's rate.
Hypothetically, if I were to open a Nationwide Smart Limited Access account and put in 50k and earn the 2.25%, I would get £1130 before tax.
£930 after the £200 allowance.
Is that then £465 against each parent's PSA?

Froggitt

From memory, if over £200, the whole lot counts as the parents interest.

It also sounds really dodgy what you are doing.....eg I would get £1130 before tax.

xylophone

https://www.gov.uk/savings-for-children

savernotspender_2

Hi, I wonder if anyone could offer advice - I have read several articles on here but my head is spinning a bit! I have one child with a CTF, currently with HSBC as this is my own bank, which was set up with the £250 gov voucher. This was set up in 2009 and now stands at £586. My second child was born towards the end of 2011 so he got diddly squat. Very remiss of me but I haven't done anything to rectify this situation since so my first question is, what would be a good savings account for child 2 (I could probably donate a lump sum of several hundred to get it going)? At the moment, we wouldn't be looking to put in any more than £10-£20 per month. Second question is, should I leave child 1's CTF alone? Again, it has been left to it's own devices but I really would like to start putting some money away for both of them. We are in a very rural area with branches closing down all over the place so ideally, it would be an account with online access. Thanks in advance.

MallyGirl

Halifax kids reg saver gives 4%. instead of lump sum plus 20/30 a month divide the lump sum up and pay in as regular deposit

xylophone

I have one child with a CTF, currently with HSBC as this is my own bank, which was set up with the £250 gov voucher.

This can be transferred to JISA - see post 3 https://forums.moneysavingexpert.com/discussion/comment/70479762#Comment_70479762

a good savings account for child 2

You can open a JISA.

https://www.gov.uk/junior-individual-savings-accounts/overview

Best cash junior ISA is currently the Coventry product.

https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

There are other types of cash savings accounts

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

Flobberchops

MallyGirl wrote: »

Halifax kids reg saver gives 4%. instead of lump sum plus 20/30 a month divide the lump sum up and pay in as regular deposit

I second the Halifax account as I believe it's the market leader. However you'll make the best gains by "front-loading" the deposits, i.e. make the first few deposits as close to the maximum £100 as possible, and reduce it later if it's not sustainable. This has to be done via Standing Order but there's no reason you can't amend the amount.

Also, if you're not too fussed about cash, you may get better results from a Junior Stocks and Shares ISA. My 2-year old has cash accounts and an investment account - the cash has an overall APR of about 3.5%, the investments are over 10% to date.

mbailey

Personally I have transferred my kids CTF accounts to JISA with Hargreaves & Landsdown. Have set up accounts with regular monthly payments. I've just selected the H&L multimanager income and growth investment with the theory being someone else with more experience/knowledge than me can control the actual investments.

sharp-spark

sharp-spark wrote: »

So for a couple, any interest above £200 is taxed at the parent's rate.
Hypothetically, if I were to open a Nationwide Smart Limited Access account and put in 50k and earn the 2.25%, I would get £1130 before tax.
£930 after the £200 allowance.
Is that then £465 against each parent's PSA?

Froggitt wrote: »

From memory, if over £200, the whole lot counts as the parents interest.

It also sounds really dodgy what you are doing.....eg I would get £1130 before tax.

I am just referring to the "Use your child's tax-free allowance" section on the website.

What do you find dodgy about it?

Also, I am already aware of the £200 threshold (I mentioned it in my original post). The question is which parent's interest is the rest calculated from? Is it split evenly by both parents?

Thanks.

xylophone

Also, I am already aware of the £200 threshold (I mentioned it in my original post). The question is which parent's interest is the rest calculated from? Is it split evenly by both parents?

£100 per parent per child.

https://forums.moneysavingexpert.com/discussion/5174362

post 3