Under 18 Savings Accounts rates

smartie11111

Can anyone tell me where my son (who is 16) can get a good rate on his reasonable amount of savings. All the good rates are for over 18s. As my son is very money aware he is very annoyed at this. The best he can get with instant access is 1.6% at his bank. He doesnt want an isa as he says he doesnt pay tax anyway as he is still a student and not earning over the personal allowance limit. Also his savings are well in excess of the amount of £5100. Any help would be appreciated. I think he should be rewarded for running his bank account well at 16 and keeping an eye on his savings.:eek:

Kalahary

If he has more than one years ISA allowance in savings, it might be a good idea to start using his allowance now so when he does get round to paying tax, he will already have most of his savings wrapped in an ISA. Otherwise he will get taxed on his savings for a few years until he can cover it with an ISA.

It also seems like you don't want an ISA because you have more than £5100. You can add more money to an ISA the next tax year, so after two years you could have £10200 (for cash ISA's) if you fully utilised your allowance both years. The £5100 limit only applies to one year, not the value of the account.

opinions4u

smartie11111 wrote: »

Can anyone tell me where my son (who is 16) can get a good rate on his reasonable amount of savings. All the good rates are for over 18s. As my son is very money aware he is very annoyed at this. The best he can get with instant access is 1.6% at his bank. He doesnt want an isa as he says he doesnt pay tax anyway as he is still a student and not earning over the personal allowance limit. Also his savings are well in excess of the amount of £5100. Any help would be appreciated. I think he should be rewarded for running his bank account well at 16 and keeping an eye on his savings.:eek:

Perhaps he should open his eyes?

Halifax offer him the following:

2.8% on £1 in a cash ISA.
2.6% in an online account with restrictions on withdrawals.
2.0% on a branch account with an ATM card.

I'm sure there are others that can beat some of these offers.

(why is having an ISA a problem if it pays a better rate?)

Loughton_Monkey

Other posts endorsed.

He can legally use a cash ISA, and just because he doesn't gain the tax advantage (yet) doesn't mean it's a bad deal. They tend to be just as good as 18-year old savings accounts.

Plus there is a potential advantage. On the assumption that some (or all) of the cash remains when he does start paying tax, then he is in a far better position having a decent amount 'locked in' to tax free accounts from prior tax years.

smartie11111

Thank you for your replies although I do find the statement "perhaps he should open his eyes" exceptionally rude. You are right he doesnt want an isa. The term instant access should have been a clue plus he cannot then replace it if he uses it. Thank you for the suggestion of the Halifax. Unfortunately they have an appalling customer service record. I am sorry to have wasted anyone's time with this.