ISA or child savings account

MorganK_2

I'm just looking at changing my savings accounts. Currently I save £45 per month each for my two children. Do you think I should open a 10% Halifax Child Savings Account or do you think using an ISA is best? I don't quite know how to calculate how much this earns me (through tax free savings) from an ISA so don't know how to compare the two. Thank you!!!!!

rb10

As far as I know, an ISA couldn't be opened in the childrens names if they are under 16 (even with you as trustee), as you have to be 16+ to get one of them.

Generally, accounts specifically for children have higher interest rates than 'adult' ones.

If you are saving monthly, then a fairly good approximation to calculate the interest is:

Interest received = 6.5 * monthly savings amount * interest rate (where, for example, 5% is 0.05, 10% is 0.10 etc)

So £45/month into the Halifax Children's Regular Saver would give approx 6.5*45*0.1 = £29.25 interest per year.

Have you seen http://www.moneysavingexpert.com/savings/child-savings-tax-free ? If you are able to save monthly, you'll do very well to get a rate higher than the Halifax 10% one! And it also has the benefit of being a fixed rate.

fullstop

This site might give you some advice:

http://www.myeggnest.com/