Ive been a numpty - kids savings

wooders

I have been putting £20 x 2 into my 2 kids accounts monthly since they were born, the statements came today and despite me grabbing the MSE mantle with my own finances Ive noticed theyve got a measley 0.75%

Kid 1 has £2350 (£16 interest!!) :eek:
Kid 2 has £1350 (£9 interest!!) :eek:

The wife is ADAMANT the kids have this in their name ( so I cant wang it into my isa ) but we admin it. It would be in there for years with a drip feed of £20 per month but has to be available if the world came tumbling down on the family!

Can anyone help with best options, Ive noticed some accounts for kids wouldnt let me start off with the amount the have already.

hope you can help

HappyMJ

Childrens regular savings with Halifax pays really well. Yes you can't start with the full amount. You drip feed it at £100 per month. So if you drip feed the savings account with £20 then set up a standing order from there to the Halifax account you'll have access to some money whilst some is locked up for a year. I'd open them up 6 months apart so not all the money is locked up at once.

DavidHayton

Northern Rock Pay 3% on their kids' savings account (max deposit is £10k)
http://www.northernrock.co.uk/savings/Find/Savings-accounts/Little_Rock_Instant_Access_Account

Maybe not the very best rate but it is convenient.

David

herewegoagain2010

My two had similar amounts of savings as yours. I decided that I would combine it all into one child's name so she had the 3K needed for a 5 year savings bond with the halifax. It's a stepped interest bond and it changes every year. I'm saving like mad now to get the 2nd child the same amount into their name, but it's slow going! I've got about 12 years before we plan on telling the about it.

wooders

thanks guys, just been perusing, there aint alot out there for kids with some saved up already, I like the Halifax idea though

wooders

DavidHayton wrote: »

Northern Rock Pay 3% on their kids' savings account (max deposit is £10k)
http://www.northernrock.co.uk/savings/Find/Savings-accounts/Little_Rock_Instant_Access_Account

Maybe not the very best rate but it is convenient.

David

David

is this 3% just for a year or longer?

Jake'sGran

Just a thought but I believe one of the well known fund companies will accept £20. You may not fancy this type of investment but it really is the way to go for long term investing.
All you need to do is choose a fund with a long and good track record.

I seem to remember that some Investment Trusts accept regular
small payments and have very low charges. I put money away
for my grandsons in The Alliance Trust.

DavidHayton

wooders wrote: »

David

is this 3% just for a year or longer?

There is no initial bonus included in the rate ... so you can argue that it is a permanent rate. However, as with all variable rate accounts, you need to watch them like a hawk. Nothing stopping them "amending" or "revising" the rate whenever they like. But I'm leaving my children's money there for the time being.

David

wooders

ING are doing 3% too with internet access fyi

herewegoagain2010

Hi David

Just had a quick look on the Halifax site and this is currently whay they're offering. I did notice the min is 2k to open, but this can't be added to.

http://http://www.halifax.co.uk/savings/accounts/other-savings-accounts/stepped-income-reserve/

You can't add additional funds to the bond, so I use a regular savers account for the interest and my monthly savings. You can get the interest paid monthly or yearly so mine is added monthly to get the best benefit in the monthly saver. My children are both under 7, so I didn't mind the idea of leaving it to grow a little for 5 years. Just remember to register for gross interest if your children don't have an income. The halifax are quite happy to open for children as a trustee.


Interest rates effective from 0.00am on 4th March 2011AER4.75%
Year 1 (gross pa)3.75%
Year 2 (gross pa)4.25%
Year 3 (gross pa)4.75%
Year 4 (gross pa)5.25%
Year 5 (gross pa)5.75%

Loughton_Monkey

Don't overlook a 'different' solution. Many people buy their kids a pension. You throw in £2,880 - in their name of course - which immediately becomes £3,600. So over, say, 15 years, it has cost you £43,200, but the kid has a pot worth £54,000 plus growth (hopefully).

The 'good' thing (if you see it that way) is that they cannot get their grubby little hands on the money, but it's not a bad start in life to have a significant pension pot. They will not get any final salary scheme when they start work.