Need to open a Savings Account for my Mum

efunc

Hello all,

I need some advice on the best way to do this. My elderly mother wants to open her first account and put away roughly £1000. The problem is that she doesn't have internet access and does't really want to do much other than put the money away and forget about it. I happy to set it up and manage it, but is this actually possible? For example if I open an ISA it'll have to be in her name because I've already max'ed out my ISA allowance. So if I open an account for her, in her name, will I be able to move funds out and manage it, or is there another way? Thanks!

rb10

There are two ways for you to be able to access the account:

1) Open a joint account with both of you as signatories. As you correctly say, however, this would exclude an ISA.
2) Get Power of Attorney for your mother.

efunc

Thanks for that. I guess I'll look into Joint accounts then. Given the poor rates at the moment and the short bonus periods I envisage needing to move the funds around regularly too. Is this usually a one person job, or require both parties?

Loughton_Monkey

It is perfectly 'possible' to open an Internet account for her. Set up an e-mail account in her name. Then apply for savings account(s) online.

You (she) would almost be almost certainly breaking rules by operating this way, but provided they don't know, I can't see the problem.

I have many such accounts in my wife's name. She is generally aware of their existance and obviously signs personally any necessary forms etc. I use her real details. She doesn't know any of the sign-ons/passwords. This is pure choice, since I handle all the finances and she cannot be 4rsed. [All details are, in fact, in our safe - so she would know of the existence in the event of my death].

efunc

Loughton_Monkey wrote: »

It is perfectly 'possible' to open an Internet account for her. Set up an e-mail account in her name. Then apply for savings account(s) online.

You (she) would almost be almost certainly breaking rules by operating this way, but provided they don't know, I can't see the problem.

Thanks. That's an option too. Quite often they ask you to nominate a linked account to transfer funds to and from. Would it be a potential problem to link to my own current account in this case? The names obviously won't match. Does that matter?

Loughton_Monkey

efunc wrote: »

Thanks. That's an option too. Quite often they ask you to nominate a linked account to transfer funds to and from. Would it be a potential problem to link to my own current account in this case? The names obviously won't match. Does that matter?

I have never done this, and so am unsure. My opinion is that this starts to look 'dodgy', and it could well trigger 'enquiries' from the bank who would/could then get a bit shirty.

Again, though, it might well 'work', since my understanding is that validation and subsequent transfers only use the sort code and account number. Name is irrelevant.

As a matter of principle, I would never link, say, my own account with a savings account in my wife's name. Mainly because I don't want the bank to be 'upset' and take action. But an alternative would be to get your mother's current account 'online'.

I do this for another relative. He doesn't have Internet (and never will - Luddite!) and so I set up several savings accounts in his name, his address, linked to his current account. I did not originally have online access to his current account but now do. This was necessary because certain of the savings accounts needed money 'pushing' rather than 'pulling' using a DD/linked account.

Although this is done (obviously) with his full knowledge and agreement, and I provide him with statements from time to time, I am unsure as to the legality. I prefer to consider that it is legal, since I know of no crime I (or he) am committing. However, I am pretty sure that somewhere in the bank T&C's would be rules that we are both breaking. It's probably him breaking them rather more than me.

I am, of course, fully aware that if I deliberately moved some of his money to me intending to use it and choosing not to tell him, then I have committed a very serious crime.

talexuser

I do the same for my elderly mother. The simplest is a joint account in a building soc (needing only single signature for withdrawals) where the savings rate and isa rate are both reasonable. You (she) can then open the isa in her name and address and transfer money in/out online from the joint account, which can be linked to her and your bank, making moving money around easier.

We are also going for power of attorney in the event of illness, the registration costs around £120 for finances only, £240 for health and finance.

efunc

brilliant, thank you both. the problem is she doesn't have a current account either. she has a joint account with my dad, but wants this to be completely separate. So does she have to open a current account before opening joint account and isa? or is it sufficient to just have this joint account linked to my account?

psychic_teabag

Some savings accounts require a link to a current account, but not all. Some have it as an option so you can set up a direct-debit and pull funds into the savings account. For joint savings accounts, it's possible that the linked account is per login, not per account, but I'm not 100% sure on that - otherwise, one party could pull money in from the other party's current account, which doesn't sound ideal..?. Some savings accounts will only pay out to a particular pre-arranged account (often the same one, which is why it has to be a current account).

But some accounts such as tesco internet saver allow withdrawals by "pushing" the money from the savings account to any account/sort-code. I don't think that one requires a linked account. They've just increased their rate, and I think that makes it competitive, though unfortunately it's a limited-time bonus.

psychic_teabag

One thing to note : if you open a joint account, the interest will be considered to be shared 50/50 for tax purposes. So if you pay tax at different rates, there will be some complications. Eg if your mother is a non-taxpayer, but you are a basic-rate taxpayer, the tax can be reclaimed on only half the interest. If you are a higher-rate tax-payer, you will have to declare half of the interest on your tax return.

efunc

that's interesting, thanks. I need to be careful then as I'm a high rate tax payer and she pays none, also I have also max'ed my ISA allowance this year already. Based on what you've said I might try to set up a joint savings account (which will have no real funds in it) linked to an ISA in her name alone, set up for online access. She only has £1000 so this will be more than enough. Thanks for your help. I will try and look into this tomorrow so will probably be back if we get stuck.