Make my grandaughter Rich:-)

AJH42

Hi.
This is my first post so apologies if it is in the wrong area.
I have been saving for my grandaughter (aged 9) the sum of £10 per month for the past 7.5 years in a Woolwich kids account. I now have a lump sum of £1147 should I move it or continue as is. I want to increase the sum to £20 per month.

cadboll

Hi. There are various accounts that offer good interest rates but it all depends what the current rate is on the account you have opened for your granddaughter. For example, Halifax have a regular saver for children - 10% Gross/AER - here you can deposit between £10 and £100 per month.

The alternative would be to place the amount into a Cash ISA. There is a limit of £3,000 in each tax year. This way you could gain interest tax free! Of course this is only an option if you don't have a Cash ISA for 2005/06.

I hope this is of help.

Amba_Gambla

cadboll wrote:

......The alternative would be to place the amount into a Cash ISA. There is a limit of £3,000 in each tax year. This way you could gain interest tax free! Of course this is only an option if you don't have a Cash ISA for 2005/06......

if the account is already in your granddaughter's name, then it should already be tax free shouldn't it??

How about the HSBC 8% interest account, or (i think) A&L have just started a 10% interest account - perfect if you were saving for her and didn't need to get at the money.... I don't know if you have to be 18+ to get these accounts tho

cadboll

if the account is already in your granddaughter's name, then it should already be tax free shouldn't it??

Good Point!!

masonic

If you can find a child savings account with a better rate (see this article - best rates seem to be 4.5-5%), then your best bet would be to stick the lump sum you have already saved into that, then start a new regular saver (e.g. the Halifax 10% one that cadboll suggested) to get the best possible rate on future contributions. You will be very unlikely to find a competitive regular savings account that would let you move a large lump sump in at the start. Of course, you could use the money already saved to make bigger contributions into the new regular saver.

Tim_L

I wonder if there are any unit trusts which allow small monthly investments? Now there is a decent cash lump sum earning interest, I'd consider something stock market based for the ongoing savings - the returns are potentially much greater over time, and there's plenty of time available.

dunstonh

Tim_L wrote:

I wonder if there are any unit trusts which allow small monthly investments? Now there is a decent cash lump sum earning interest, I'd consider something stock market based for the ongoing savings - the returns are potentially much greater over time, and there's plenty of time available.

Depends on what you mean by small. £50pm is the norm with the fund supermarkets but there are some individual companies that will go down to £20 pm i believe.

isasmurf

Amba_Gambla wrote:

How about the HSBC 8% interest account, or (i think) A&L have just started a 10% interest account - perfect if you were saving for her and didn't need to get at the money.... I don't know if you have to be 18+ to get these accounts tho

You need to be 21 or over to apply for the A&L Regular Saver.