Childrens Savings

The_Pixi

My nephew was 4 last week and it made me realise how fast time goes by, so I though that Id start a savings account in his name.

I want this to be a surprise for when he gets to 18, it wouldnt be a lot of money but enough for driving lessons or a car or a holiday.

As its surprise I have had my Mum rooting out utility bills in my brothers name and have ordered my nephews birth certificate.

I plan to put £10 a month in via a Direct Debit so over 14yrs it should have £1680. Anyone recommend any childrens saving accounts so I can maximise the interest ernd.

i have looked at Halifax, but Im wondering if anyone has a alternative suggestion, all the kids accounts seem really low and dont want the effort of switching it every year.

So any suggestions or should I just go with Halifax?

Loughton_Monkey

As noted on this site, the best 'clean' rate is Halifax's 2.6%. You could get a bit more elsewhere, but would have to switch after 12 months.

Of course nobody knows how long Halfax's rate is going to remain that 'good'. So to do the young chap some justice, you probably need to keep your eye on it regularly and switch when necessary.

Although off-topic, I note (mathematical genius you know) that he must have been born 2006, which happens to be a pretty good year for Burgundy. Now is exactly the right time to buy a nice Beaune, or Cote de Nuits, of 2006 vintage. Lay it down properly for the next 14 years or so. Then present it to him on his 18th (or 21st).

Might cost you a few bob, even now, but for him to buy such a bottle at that time would probably cost him more than is in the account. Tax free!

martinman3

As noted on this site, the best 'clean' rate is Halifax's 2.6%. You could get a bit more elsewhere, but would have to switch after 12 months.

The best clean rate for a child's account is Northern Rock at 3.00% AER, that Halifax account is for 11yrs and over.

You should read this http://www.moneysavingexpert.com/savings/child-savings-tax-free
which gives you some ideas.

You should also get either parent of your nephew to sign a R85 form so that the interest is paid gross, otherwise it is paid net. This means that your brother will know about the account even if your nephew doesn't.

jennifernil

The Halifax Children's Regular Saver is good if you can put in at least £10 per month (anything between £10 and £100), it pays 6% at the moment. You will need the birth certificate and ID/address proof for YOU if you are not an HBOS customer already.

You can do one every year, it just continues if you keep paying in. You need to set up a Standing Order to pay in.

However, at the end of the 12 months they pay out the £120 plus interest into a linked account they open, something like a "save4it" which pays a rubbish intetest rate, so you need to do something else with the money then.

One option is to pay it back into the RS......£100 the first month, in the second month the other £20 plus interest and your £20 for months 1 and 2, then continue with £10 per month. As a trustee you can withdraw the money from the save4it account. The standing order can be varied at will, as long as it is between £10 and £100.

Another option is to place it into an account in your own name, but that may have tax implications.

Once he has accumulated £500 there will be more options open to you. for example the HBOS Guaranteed reserve.
Or you could look at premium bonds.....he might get a big win!

There are other similar regular savers with other providers, but Halifax is best right now.

martinman3

jennifernil wrote: »

Once he has accumulated £500 there will be more options open to you. for example the HBOS Guaranteed reserve.

Cheshire BS fixed rate bonds beat Halifax Guaranteed Reserve for both 2 and 3 year terms as they can be opened in trust for a child and the minimum opening balance is only £100.
http://www.thecheshire.co.uk/investment-saving-account/fixed-rate-bonds/index.asp

Note: This is not mentioned on the MSE Children's Savings page but should be.

The_Pixi

Thanks for your replys, I'm going to look at those suggestions. Thanks:) including the wine suggestion :-)

welshmoneylover

Loughton_Monkey wrote: »

Although off-topic, I note (mathematical genius you know) that he must have been born 2006, which happens to be a pretty good year for Burgundy. Now is exactly the right time to buy a nice Beaune, or Cote de Nuits, of 2006 vintage. Lay it down properly for the next 14 years or so. Then present it to him on his 18th (or 21st).

Might cost you a few bob, even now, but for him to buy such a bottle at that time would probably cost him more than is in the account. Tax free!

You got me intrigued here.. where would one buy this type of wine?

I just hope I don't drink it