Best Account to allow my non-tax paying wife to earn interest on our savings

michaels

As my wife does not pay tax it would be best if we could have our current and savings accounts in her name. However I also want to avoid the loss of 3 working days interest in moving my salary into this account - are ther any banks, where if we both banked with them, that would let me move money instantaneously from my account to hers and back?

Could we also do the same with putting accounts into our childrens names if my wife starts paying tax again?

Deemy

Coventry child benefit account, pays 7%, plus 5.2% on anything else.

grumbler

michaels wrote:

Could we also do the same with putting accounts into our childrens names if my wife starts paying tax again?

‘Using your children tax efficiently’, sounds slightly callous, but if you are better off, so are your kids. Saving money in a child’s name means it’s tax free and often at a higher rate of interest. It’s perfectly possible to have one account for your child to put their pocket money in, and another for any larger amounts.

Children can earn £100 interest per year before you’re taxed on it

However, don’t assume you can dunk fortunes in your kid’s name. If a child generates more than £100 interest in the course of the year from money specifically given by each parent, this income is taxed at that parents’ tax rate.

Best Child Savings (and use your child for a sneaky tax free allowance)

michaels

The problem is tho I really want one at the same bank as my current a/c as I don't want to change that and don't won't to lose interest while money moves back and forth between accounts - sadly my curent bank, whilst paying 4% on current accounts, does not have any competitive savings accounts and anyway I am not sure if you can move money instantly to another customer's account with the same bank - does anyone know if this is generally the case?

lush_walrus

Michaels, the best option is probably to change your and your wifes current account to Alliance & Leicester for current account and savings account as they have very good rates for both at the moment (online saver 2 for savings) they also have 10% regular saver. Moving money between savings account and bank account is instant, so I guess one option would be to have a joint bank account and move the money straight across to your savings account and keep a tight watch on dd and bills etc and move the money over on the day.

But if you don't want to change your bank account, and don't want to loose 3 days interest on moving money from bank to saving, then you are snookered, as of course the only options available to you are within that bank.

grumbler

michaels wrote:

...if you can move money instantly to another customer's account with the same bank ...

Usually yes. I always do this with Nationwide accounts. Not sure about A&L.
BTW Nationwide will pay 4.25% on current account (£1000 p.m. credit required) from April; their instant access e-savings account pays 4.75%.