Nationwide Smart/Smart2Save account- keep it or move money somewhere else

AFCChris

We have had a Smart2Save account (which I think is now called the Smart) at Nationwide since 2001 for our daughter. There is about £1500 in there. I was wondering if we should keep this going or move the money somewhere else where it will get more interest. We pay in around £20-£40 a month and occasionally bolster it with more.

grumbler

AFCChris wrote:

We have had a Smart2Save account (which I think is now called the Smart) at Nationwide since 2001 for our daughter. There is about £1500 in there. I was wondering if we should keep this going or move the money somewhere else where it will get more interest.

4.76% is a good rate for the moment ...

We pay in around £20-£40 a month and occasionally bolster it with more.

For regular saving it is better to use Halifax Children's Regular Saver (10%), then when it matures in 12 months, move money to Nationwide.

caveat_emptor

Take a look at https://www.moneyfacts.co.uk there seem to be better childrens accounts than Nationwide. but for £1500 you probably wouldn't notice the difference. Halifax do a short term bond paying 10%.

GrumpyOldMan_2

Just a suggestion... but have you thought about diverting some or all of the money into a Stakeholder pension for your daughter? Anyone (regardless of age) can contribute upto £3000 pa into one of these pensions, and the benefit is that the tax man will add a further 22% in tax relief. e.g. for every £78 you invest, the tax man will add another £22.

Another advantage (perhaps) is that your daughter will not be able to blow the cash or access it until retirement. Whilst it is nice to also have some readily accessible money for when they reach 18 or whatever age, just because you have in mind particular purpose for the money, your daughter may not agree with you and end up blowing the cash on something else! Remember that any money invested via a CTF (Child Trust Fund) actually belongs to the child and they are able to do whatever they choose when they reach 18. Slightly different if you hold a savings account as a Trustee but not much different.

If you decide to go down this route, you could also save a regular amount into the Halifax Regular Saving account to pickup your 10% interest and then at the end of the 12 months, pay the whole amount with interest as a single payment into a stakeholder pension and benefit from the guaranteed growth over the previous 12 months plus Gordon Brown's 22% tax relief on the single payment. What a winner :j