Son's Uni Fund - where to put it?

kateo

I have saved £3,500 in my son's Nationwide account. It is earmarked for university. He has at least 3 yrs to go ( unless he takes a gap yr), so will not be needed before then. We put into the account monthly.

He turns 16 in Sept. Where is the best place to put this money? I have thought about an e-bond with nationwide., just over 6% I think.

What do you all think?

Thanks
Kate

jem16

How about Kaupthing Edge paying 6.55%. You could also have a fixed rate with them for a 3yr term for the lump sum.

Have you an ISA? If not you could use it for this as the proceeds will be tax free instead of paying 20% tax on the other accounts - assuming you are a taxpayer.

Rikki

At sixteen he can take out an ISA.

Personally this is alway the first place I look to save before any other.

TH1878

Cash ISA needs to be the first port of call once he turns 16.

a7man

Same as above, you have a 3600 allowance for each tax year so you will only have £100 left if you put the £3500 into an ISA this year. Barclays offer a good ISA at the money paying 6.27 AER.

You should therefore also open up a Kaupthing acct for any extra you are going to contribute this year, then pay that in to the ISA on 6th April 2009.

Lokolo

Why an ISA?

He is going to uni, therefore he is currently studying, therefore I highly doubt he is earning over his personal allownace.

Go for a high interest savings account, fill in an R85 form that way he gets tax free interest.

Normal savings, you can put £1000 in Alliance and Leicester Premier 21, earning 10%.
Then the rest in a normal savings account which will pay more than most of the ISAs available now.

jem16

Lokolo wrote: »

Why an ISA?

I was suggesting that the OP puts the money into an ISA in her own name not her son's. Perhaps she doesn't want her son to have control over this money as it's earmarked for his university education.

Lokolo

Ah okie that makes more sense

kateo

Thanks for all the suggestions. I do already have an ISA in my name ( as does my husband).

I don't mind putting money in my son's name - as I do trust him ( & i would keep hold of all the paper workt etc myself - just in case!!;) )

So.... I guess i have 3 options - an ISA in my son's name, or a higher saving acc. (tax free), or a combo of both.

Thanks everyone. I shall start looking around.

Kate

kateo

Go for a high interest savings account, fill in an R85 form that way he gets tax free interest.

Normal savings, you can put £1000 in Alliance and Leicester Premier 21, earning 10%.
Then the rest in a normal savings account which will pay more than most of the ISAs available now.[/quote]

At what age can a 'child' open one of these accts? I have £1,500 in my 13 yr old daughter's acct. Again earmarked for uni.

Cheers.

Kate

Just checked on line - 16-20 yrs!