Confused: Savings account for a new born!

Gone2mars

Hi All,

I've recently been made a dad and have decided to bank my son's child benefits into a savings account until he is 16. I plan to 'forget' about the savings for a few years and let them build up, hopefully all the way until he's 16 so he can have a nice cash sum to rely on when he's older.

I've been looking into ISAs and other savings accounts and to be truthful, havn't got a clue what would be best to use for the task.

My father has also confused the issue by telling me that 'Internet Bonds' are better to invest in than ISAs.

I was wondering if someone would be so kind as to advise me on the best type of account to open for my circumstance?

The child benefits are currently 20.30 a week if that makes any difference.

Many thanks in advance!

opinions4u

I plan to 'forget' about the savings for a few years

Totally the wrong thing to do. Review what's happening at least once a year or the only winner will be a financial services provider.

Consider:

1) Halifax Kids Regular Saver - high interest for fixed monthly savings of up to £100 a month
2) Northern Rock Little Saver (I think it's called) - easy pay in / take out
3) Look in to investments (Google Alliance Trust or Aberdeen Asset Management) - you should be able to get better returns over a 16-18 year period
4) Just do (2) and wait until more information about Junior ISA is available later in the year.

atush

I would pyt half of it in a saver like the ones above. The second half I would invest in an investment trust savings plan. you can put in as little as 25 a month ( I had one for my sons started and couldn't afford that so used Witan and put in 25 per quarter and upped it to month when I could). It does go up and down with the market, but because it drip feeds in each month, you buy more units when the prices are going down so that when they recover it jumps up hugely. This is called Pound cost averaging. And my boys are very happy with the thousands they will get when they go off to Uni.

As a side note, don't put it for when they are 16. put it for 18 if in full time education, and 21 if not. It does a 16 yr old no good to be given a load of dosh. He'll spend it so fast your head will spin.