Saving for my God-daughter

mattmountney

Hello all!

One of my best friends through uni recently made me the godfather of his baby girl. I'd like to start some kind of savings account for her so she'll have a bit of a lump sum when she's older, but I have absolutely no idea what.

Can I open a Child Trust Fund for her? Are there any other appropriate means of saving? Aside from a regular savings account/ISA I have no clue about these sorts of things and I don't know if it matters or not that I'm not actually related to her.

Any help will be greatly appreciated.

Cheers,
Matt

Lokolo

Well you know about Regular Savers so heres this:

http://www.halifax.co.uk/savings/childregularsaver.asp

As you know, its 12 months, so you'd have to open one each year.

CTF I have no idea, I think you'd need the parents to do this (although for the childrens you'd need the child anyway).

se999

How many children or god children are you going to have, it's fair to treat them all equally, so maybe starting a contingency fund for all future one's might be good

Lots of people have this idea on the first god child/neice/nephew etc., but what about the others.

JustJewels

hi mattmountney,

Welcome to the wonderful, but confusing world of saving for 'minors' - (kids to you and me)

What goal do you have in mind for the savings? I mean, do you plan to present your god child with a big fat cheque at age 18? Are you happy just to contribute a little cash to the child's Child Trust Fund? (Anyone and everyone can contribute up to a maximum of 1,200 pounds per year to a CTF, but you'd have to get the details of said CTF from the parents/guardians). Are you going to contribute a tenner for each birthday or will it be a more substantial sum?

If you want to open a "standard' children's savings account with a bank or building society, you need to do your due diligence just like if the account was for yourself, e.g. what is the interest rate, what are the access requirements, minimum/maximum deposit etc. Some accounts are actually targeted at specific age groups, so your god child may not be eligible...tut tut, financial discrimination at such a young age!

As a non-parent, any savings interest paid on an account that you open for your god child should not be taxed, so you have an important tax advantage from the start - make sure you fill in tax form R85!
http://www.moneysavingexpert.com/savings/child-savings-tax-free

Most banks allow you to open an account as trustee for a child, even if not yours. (But providing the documents for ID can be tedious.) And you do have to make sure that the account does allow trustee set up, and the only way to know is to ask...

If a conventional bank/building society account sounds not "interesting" enough, then there are options like National Savings Childrens Bonds, premium bonds, and in the interest of completeness, options like pensions (yes, really!), unit trusts for children...at which point your head starts to hurt trying to predict future interest rates/investment performance....and if you're anything like me, you then head to the nearest high street bank with their free piggybank...

Seriously, first you need to know how you want to save for your (lucky) god child, then the rest will follow

And good luck...!!!!