Poor Childern's savings accounts

Peter69

My daughter is just going to secondary school so I thought it would be time to give her some control and responsibility for her money.

I have decided to give her half her child allowance. The intention is she has to buy all her 'social' clothing, phone top ups and any other extras she wants. I have got her an O2 pre-paid card (not listed on here but its completly free if you have an O2 phone) and a bank/ savings account.

I have searched for a half decent account and they are all offering rubbish interset with too many restrictions.

I hace decicded to get a Santander current account as it pays 3% (5% if I had an account with them) and no major restrictions. They offer a savings account at 0.75%!!! WHY such a low rate?

I guess the banks are giving our kids a financial education 'banks rip you off' :mad:

opinions4u

WHY such a low rate?

Would you like a long winded explanation of the Credit Crunch, falling interest rates and the cost of managing a high transaction easy access account?

You've found a 3% account with a major high street provider. What's the problem?

(I would expect that 3% rate operate at a loss for the provider).

Reaper

Peter69 wrote: »

I hace decicded to get a Santander current account as it pays 3% (5% if I had an account with them) and no major restrictions.

When you say no major restrictions I assume you have checked the following will not be a problem:

1) Interest is only paid on the first £500
2) No interest in paid in any month where you fail to make a deposit

They offer a savings account at 0.75%!!! WHY such a low rate?

If you want a simple savings account the Northern Rock offer a 3% instant access account. You would struggle to find adult accounts to match that.

Peter69

Thanks for the responses.
Yes Opinions4u, I am aware of the credit crunch.

My actual issue is that the bank offers 0.75% on a savings account which has restrictions on making withdrawals yet offers 5% on a current account with limited restrictions.

Surely the banks marketing departments are smart enough to offer not so profitable accounts to youngster knowing that in later life they will not change institutions (regardless what :money: advises).

Thanks reaper, I did know these restrictions but I will be paying in every month & at £20 my daughter won't hit the top limit for 2years if she doesn't spend (unlikely).

As an addition I have the same issue with ISAs, as a non- UK tax payer, I get a better interest with a normal savings account & instant access

martinman3

Reaper wrote: »

If you want a simple savings account the Northern Rock offer a 3% instant access account. You would struggle to find adult accounts to match that.

I agree that this is an excellent account, however, it can only be operated by a trustee. So as the OP is trying to give their child some independence it is not a good choice as the OP would need to make the withdrawals for the child or sign the forms if operated by post.