investing children's savings

scotmum_3

My children - 10 and 14 - have savings in a high street BS childrens account but the rate of interest is woeful. One has about £3.500, the other about £6,700. I want to get a better rate of interest and am looking at fixed rate bonds - as they wont need to access the money for several years - but most of the good rates seem to have disappeared. Any ideas most welcome. I wold also like an ongoing savings account for each of them - where the money can accumulate and be reinvested later.

Lokolo_2

You say you want an account where you can add money to it continuously? Unfortunately fixed term bonds don't let you do that, however you could put the amounts you mentioned into fixed rate bonds, and anything accumulated into a 2.8% AA Savings account.

The AA savings account is Instant Access but the rate is fixed for a year, so you could use this account to earn a half decent rate on accumulating amounts, and when you have enough, put this into a fixed term bond too!

ICICI offer up to 4.75% for a 5yr fixed bond, definitely worth considering if you want a reasonable rate and are prepared to gamble on interest rates not going up significantly in the near future!

Everything would need to be in your name though as most of these accounts you need to be 18+ to open them, especially the bonds. So there may be the issue of paying income tax on savings interest, if you are earning over the personal allowance, I'm not 100% certain though

ses6jwg

You could put what you have now into a fixed rate bond in trust for your kids, the highest paying 1 year bond you can find, then set up a Halifax Kids Regular Saver paying 6% ?