Use your child - best child savings account

xylophone

if my husband and I were to put £50k into the Nationwide account for our son and it earnt the £1130 interest that would count towards our own PSA. So depending upon how much interest we earn from other savings we would either need to pay tax if above the PSA or not if below. My main question would be how is the interest split? Is it always 50/50 regardless of which parent put in.? For example say I magically won the lottery and put in £50k, would the £1130 interest be against my PSA or would it be split evenly? I'm only asking as I'm a basic tax payer and my husband is higher so I want to make sure that we either don't go above our individual PSA by investing/ saving our money in a different way, but if we do (with such amazing interest rates at the moment) I put into our self-assessments the right figures and pay the correct amount of tax.

Your husband could give you the money - (pay into your sole account) - you could choose to make the gift to your child.

Emilybutt12

Thank you for your responses, I think a look at our savings pots is required and then I will be prepared for filling in Self-Assessments if required.

Loup

I'm looking to open two childrens savings accounts for my newborn twins as friends and family have already sent them cash and cheques for their future. Whats the best account to open for them - an initial opening payment will be approx £750 per child? I'm not looking for instant access to this cash ...

eskbanker

Loup wrote: »

I'm looking to open two childrens savings accounts for my newborn twins as friends and family have already sent them cash and cheques for their future. Whats the best account to open for them - an initial opening payment will be approx £750 per child? I'm not looking for instant access to this cash ...

Junior ISAs are worth considering, as these shelter the money from tax and can only be accessed once the children reach 18.

https://www.moneysavingexpert.com/savings/junior-isa/ covers the basics and gives info about market-leading cash-based products, but for nearly 18 years it's probably better to use a stocks and shares JISA, which is likely to deliver better long-term growth. See https://www.moneywise.co.uk/investing/investing-children/the-best-stocks-and-shares-junior-isas.

xylophone

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

Emilybutt12

Loup wrote: »

I'm looking to open two childrens savings accounts for my newborn twins as friends and family have already sent them cash and cheques for their future. Whats the best account to open for them - an initial opening payment will be approx £750 per child? I'm not looking for instant access to this cash ...

Sorry to be replying now, it may be too late. In my experience Junior ISAs are not all they are cracked up to be. There are plenty of high street banks/ building societies which have much better rates of interest, which you can open in trust and many of which you can remain the trustee until the child is 18. As the money isn't from yourself (parent) then the amount of interest received is under their (each child's) personal allowance, and so they wouldn't be taxed on interest anyway on this sum of money. I would look at the MSE child saving accounts page as that has lots of different options. The other way would be to drip feed into a child's regular saving account from a child's saving account (ie one where you can save the £750 in a lump sum). That is more time consuming to set up but once done it's done. MSE have information on drip feeding, albeit for adult accounts. By all means message me as I've done quite a bit of research for my child's saving.

eskbanker

Emilybutt12 wrote: »

There are plenty of high street banks/ building societies which have much better rates of interest, which you can open in trust and many of which you can remain the trustee until the child is 18.

[...]

The other way would be to drip feed into a child's regular saving account

[...]

I've done quite a bit of research for my child's saving.

Given the market-leading benchmark of 3.6% for a junior ISA (with Coventry), perhaps you could post details of some of these many better-paying (non-regular saver) taxable accounts that can be opened in trust?

Emilybutt12

eskbanker wrote: »

Given the market-leading benchmark of 3.6% for a junior ISA (with Coventry), perhaps you could post details of some of these many better-paying (non-regular saver) taxable accounts that can be opened in trust?

When I opened savings accounts for my son there were many high street banks offering better rates than a JISA, and yes recently these rates have increased. However there is still the Nationwide saver at 3.5% (just shy of Coventry 3.6%) which you can save slightly more than in a JISA, but they are comparatively the same. Santander offer the 1,2,3 in Trust at 3%, again at the time when I opened savings for my son this beat JISAs. There are also many pros and cons to both a JISA and a savings account for a child. I pointed the poster in the direction of MSE child savings accounts page, and was merely offering the poster alternatives to consider, rather than just the two weblinks to JISAs.

As also mentioned there are many regular savings accounts which can beat a JISA, just these require a bit more leg work at the beginning to set up if you are drip feeding. Again giving an alternative.

eskbanker

Emilybutt12 wrote: »

When I opened savings accounts for my son there were many high street banks offering better rates than a JISA, and yes recently these rates have increased. However there is still the Nationwide saver at 3.5% (just shy of Coventry 3.6%) which you can save slightly more than in a JISA, but they are comparatively the same. Santander offer the 1,2,3 in Trust at 3%, again at the time when I opened savings for my son this beat JISAs.

Er, right, so (in the context of alternatives to JISAs and regular savers, in the present rather than the past) you actually meant:

Emilybutt12 wrote: »

There are [STRIKE]plenty of[/STRIKE] no high street banks/ building societies which have much better rates of interest, which you can open in trust and many of which you can remain the trustee until the child is 18.

Emilybutt12 wrote: »

There are also many pros and cons to both a JISA and a savings account for a child. I pointed the poster in the direction of MSE child savings accounts page, and was merely offering the poster alternatives to consider, rather than just the two weblinks to JISAs.

As also mentioned there are many regular savings accounts which can beat a JISA, just these require a bit more leg work at the beginning to set up if you are drip feeding. Again giving an alternative.

There are indeed a couple of regular savers that may give a temporary minor short-term (12 month) advantage over JISAs, but that still doesn't really address the issue of long term saving/investing for newborns, starting from a lump sum....

Emilybutt12

May I ask why you have to be so rude? Do you enjoy being nasty and condescending? I have been polite and courteous throughout.

As a parent we want the best for our child's money, so to look at lots of different options, and I was providing alternatives to the one sided JISA. These alternatives can still be used in the long term to get the best return.